Review– International Aid and Democracy Promotion: Liberalization at the Margins

Title: International Aid and Democracy Promotion: Liberalization at the Margins
: Bann Seng Tan
Routledge, 2021

The provision of finance by one state to another has a number of names. The title of this work uses the term ‘international aid’, but the author is really referring to Official Development Assistance (ODA), which is the term used by the OECD to refer to, “government aid that promotes and specifically targets the economic development and welfare of developing countries.” Therefore, the author is following the normative position that democracy promotion falls within the remit of ODA. This is accepted by all OECD donors. In fact, it is a stated aim of some ODA. This means that some donors are using their aid budget, and designing programs and projects to specifically target democracy promotion in a recipient. This book is an attempt to determine whether such a thing is even possible, and if it is, how would a state do such a thing.

The author begins this investigation with a discussion of aid in general, its effectiveness at achieving the goals of the donor, and with a Large-N study. Following on from this are case studies. Finally, the author offers some policy recommendations.

In chapter one, the author uses Selectorate Theory to explain how foreign aid is more effective in non-democracies. More effective means affective at achieving the goals/ policy concessions of the donor, and this means that development in the recipient is not the goal. It is an unfortunate fact that this somewhat cynical assessment of foreign aid is largely a reflection of the reality. However, the key point the author is trying to make is that in an autocracy, the stakeholders in the recipient county are a smaller group, and so the incentive offered by the donor (in the form of aid) can be used to effectively “buy” their support. In this way foreign aid can encourage and support autocracy. Such an analysis does not bode well for democracy promotion.

However, there are certain types of foreign aid in which donors specifically target democratization/ political liberalization. To judge the effectiveness of such aid in actually promoting democracy, the author divides recipients into two groups. One of these groups are called the ‘primary’, because they have value for the donor, and this can be used as leverage. The existence of natural resources or geopolitical considerations enable these ‘primary’ states to resist donor efforts for domestic political reform. The author argues that democracy promotion in these ‘primary’ states would not be effective, and that donors would not try it anyway, because other interests are more important. But, a ‘secondary’ group of recipients have no such value to the donor, and so here the chances of foreign aid being effective in actual democracy promotion is higher. Essentially, these ‘secondary’ states have no leverage and so are more susceptible to donor pressure. The author therefore focuses on these ‘secondary’ recipients.

Using Polity IV as a measure of democracy, and using aid flows from AidData, the author determines that aid can indeed be effective at promoting democracy in ‘secondary’ recipients. We can perhaps question the value of such a large scale study, and we can also perhaps reach the same conclusion with just our common sense. As an indication of this limits to such studies, the author uses the OECD CRS category of “government and civil society” as democracy promotion, or democracy aid. Such categories are highly problematic, and it would be necessary to look into the exact details of the aid to determine if it is actually even targeting democracy. A further problem, and one which the author recognizes, is that there is simply no way to measure the importance of the recipient to the donor.

Reducing the scale, the author argues that the African continent is a better place for donors to promote democracy that Asia. The African states have less leverage, and the Asian states are more successful at development, meaning that they already have a higher level of good governance. In essence, the states of Asia generally have more leverage.

To show this, the author uses Myanmar as a case study. According to the author, Myanmar has  ‘moderate salience’, meaning a moderate level of leverage over those donors trying to promote democracy in Myanmar. The author correctly outlines the importance of Myanmar to the PRC’s long term strategic plans- energy supply diversification, access to Indian Ocean. Furthermore, Myanmar provides support at ASEAN as it can block much criticisms of PRC activities in the South China Seas. Finally, economic cooperation between Myanmar and the PRC is also beneficial for the development of the less-economically developed Southwest region of China. Therefore, this close relationship with China enabled Myanmar to “donor switch”, essentially refusing aid from the West and preferring aid from China, which had no conditions attached (in terms of democracy). The author also correctly explains the praetorian worldview of the Tatmadaw, and also the long-term underdevelopment of Burma, caused essentially by Marxist ideology. However, there are considerable flaws in this case study. Firstly, the author does not even consider Japan as a donor. Between 2011 and 2015, the crucial period of the early transition in Myanmar, Japan was either the largest or the second largest donor. Japan was perhaps the most crucial donor in assisting the transition and in facilitating the new interactions between Myanmar and the international community.

It is true that the US had little interest in Myanmar prior to the transition, and this was despite concerns about Myanmar’s increasing dependence on China. Because of this, the US prioritized democracy promotion. The author says this is because Myanmar has “marginal importance”, although it is perhaps more accurate to say that this is because Myanmar had no importance to the US. The author identifies the ‘Pivot to Asia’ as Obama’s “signature foreign policy initiative”. It may be signature for Obama, but the most usual comments in Southeast Asia in reference to the ‘Pivot’, were “where is it?”, or “I can’t see it”. in fact, the U-turn in US policy to Myanmar was perhaps the only visible event in the Pivot to Asia policy. There is a strong tendency to overplay the importance of US policy in encouraging the transition in Myanmar. It is generally accepted that this transition was home-grown. however, the sanctions period did push Myanmar towards China, and one of the primary reasons for the military to initiate the transition in Myanmar was to reduce over-dependence on China. In the analysis of the sanctions period, the author again ignore any role that Japan played.

The second case study involves Egypt and Fiji. In the case of Fiji, the author again ignores Japan which was the second largest donor, after Australia between 2011 and 2015, the years under study. In the case of Egypt, after 911, the US prioritized war on terror, even though there was also an increase in democracy aid, which was a lesser priority. It is possible that such aid was not really for democracy, and this was merely a convenient cover. It would be necessary to look at the details of specific projects and programs to determine whether it really is democracy aid. None of this was included. The author asserts that Fiji did succumb to donor pressure, and that held multi-party elections in 2014. After the elections, aid sections were lifted. However, the party of the coup leader won the election, and the author does not delve into whether this was also an “orchestrated contest” as is asserted in the case of Egypt.

In conclusion, the issue of leverage is an extremely important one in international relations, and diplomacy. This can help us to understand the power dynamics of aid giving and receiving. Having said that, a much closer look at the actual details of aid programs and projects would be necessary to determine whether or not they are able to promote democracy or liberalization in a recipient.

Reviewed by Patrick Strefford
Patrick Strefford is a Professor at Kyoto Sangyo University, Japan.