Mapping out a novel way to assess the effectiveness of development aid

Assessing the effectiveness of international aid in Indonesia, the world’s fourth most populous country and home to some 17,000 islands, is no easy task. But that didn’t stop Nathan Peng, assistant professor of political science (education) at Singapore Management University.

In his paper, “Political Equality and Aid Effectiveness: Infrastructure Distribution and Development Aid Effectiveness in Indonesia,” which is currently a working draft but has already been presented at several academic programs, Professor Peng divided have proposed a new way of measuring political accountability through of public infrastructure.

“I’m using infrastructure distribution as an indicator of local politics,” he says. “That’s the novel approach.”

So why focus on a large country like Indonesia? It is diverse but has a common institutional basis, says Professor Peng. “There are so many constants and yet so many social, political and economic contexts within a single country.”

“The great thing about Indonesia is that the federal government decides the budget and leaves it up to the local governments to do what with it. That means whatever different results we see in the distribution of infrastructure. They are caused by local politics, not by different. differences in resource levels or national law. So that neatly separates the local politics I want to study.”

In the paper, he cites previous research that highlights how political elites are more likely to use resources such as roads, schools and health facilities in the public interest. Economic development When they need the support of a large part of their population to stay in power.

The paper examines whether the same logic can be applied to international aid. That is, whether development aid promotes greater economic growth when allocated to regions with greater political equality.”

“Now almost a century later, since World War II, we’ve been trying to promote development in countries that we thought were far behind. So the answer I finally gave was Tha politics: how we organize ourselves, what we believe, who makes decisions, and who implements those decisions and why? That’s what drives economic growth.”

The paper focuses on ‘a specific aspect of local politics: constituency size’, i.e. the size of the constituencies you are accountable to in order to stay in power.

The World Bank, which has been providing development aid for decades, “has not understood how to objectively compare different political contexts,” says Professor Peng. “What I’m doing here is really a way to start doing that and the approach I took was to look at the results that reflect the local politics, the division of the streets.”

“Existing research generally looks at public spending and the extent to which public funds are used,” says Professor Peng. “And the general consensus is that if you give it to an elite that has the narrow support base that it needs to stay in power, that elite is usually just going to please that narrow support base. So will waste money and leave the rest. To become weak.”

‘Overall impact of aid is unclear’

Professor Peng believes that the World Bank’s strategy of giving to Indonesia’s poorest regions makes sense even though the impact of the aid is somewhat ambiguous and uncertain.

He says the World Bank’s mandate is to eradicate poverty and therefore it makes sense to help poor areas. “Unfortunately, the sectors that could use aid the best, where you see the most growth overall, that’s not where the aid is going and I think that’s a good thing because instead of helping everyone want to bring to the same level the highest potential areas and then you are creating greater inequality within the country.

“My second finding is that I expected that giving more politically equal regions would lead to a better use of aid money and resources, but I didn’t. Ironically, when you have more politically equal regions If you give aid to unequal areas, you see more growth. And that’s the result I wanted to warn against. Just because you see a better result doesn’t mean you should do so. They really need to take into account the local politics so as not to do more harm than good.”

As someone who previously worked for Singapore’s Ministry of Trade and Industry as well as the Ministry of Social and Family Development, Professor Peng believes it will be difficult to design systems that address this ‘problem’. Be able to work around, where one has to give. To “do real good” on KPIs that can’t be quantified, at least not quickly.

The scope of his study was ambitious given the vast expanse of the country. Methodologically, Professor Peng took both a qualitative and quantitative approach, interviewing a wide range of experts and then examining satellite data and images. “Given that the quality of data in developing countries is usually quite poor, I thought that by using Satellite data It will help solve many of the problems we face as practitioners.”

“When I spoke to civil engineers, infrastructure and political experts in Indonesia, I wanted to confirm two things: if roads disappear from satellite images after a few years and if local political leaders influence infrastructure decisions. There are styles. So, I wanted to make sure. It was politics that was driving the results and nothing else. That’s why I took both a qualitative and a quantitative approach.”

It may seem strange to see if roads disappear, but it is important to understand whose decisions are responsible for existing roads. The World Bank has acknowledged that corruption is a problem in Indonesia. And if corruption had been involved — and for Professor Peng “corruption has a very strong political element” — the roads might not have been built in the first place because the money was siphoned off. And even if the roads were built, they might not have been properly maintained and later became overcrowded due to lack of funds.

Based on what Professor Peng calls ‘a proof-in-the-pudding approach by focusing on the consequences of political conspiracies’, the paper paints a very different picture than the one given by the vast majority of constituencies and winning coalitions. Literature will lead us to expectations. Dollars behave like government funds, then should be used more effectively when allocated to politicians who are accountable to their larger constituencies, rather than as political pork for a few. As opposed to wasted.

The paper adds, “What is unexpected is that more politically unequal regions are associated with higher rates of growth after aid distribution.”

The study’s results, the paper says, are ‘complex.’ First, with aid going to poorer regions rather than to regions that could use the aid more effectively, the paper suggests ‘results that at first appear economically suboptimal. More may actually represent real progress.”

Second, while providing aid to regions with politically oppressive leaders ‘can do more to unlock economic potential’ and ’empower the politically marginalized to lay the groundwork for their elimination,’ economic The relationship between development and political representation is ‘far from the letter. “

Finally, while aid may be able to unlock economic potential, it is by no means guaranteed. The overall impact of aid is still unclear.”

The paper concludes, “Overall, these findings point to a potential conundrum for donors, where giving money to more politically unequal regions may lead to greater economic growth in the short term.” But with the potential downside of consolidating more oppressive positions. The political elite. What is clear, however, is that measuring the proportion of elite constituencies to hold power will help us make more accurate estimates of how development aid promotes economic growth.”