The Role and Impact of Foreign Aid in Neoliberal Development
Yahya GülsevenThe impact of foreign aid on development and economic growth in poor countries has been a subject of academic debate for many years. From the first years of the post-World War II period until today, many studies have been conducted to evaluate the impact of foreign aid on development and economic growth. In discussions on the effectiveness of foreign aid, which are based on the results of these studies conducted by academics from many different disciplines, such as development economics, international relations, and sociology, no consensus has not been formed on the effectiveness of foreign aid. Although criticisms of foreign aid are generally associated with Marxist/critical approaches, especially Dependency Theory, neoliberal thought has also directed harsh criticism at foreign aid. However, despite neoliberal criticism questioning the usefulness and importance of foreign aid, the amount and scope of foreign aid provided to poor countries has continued to increase since the rise of neoliberalism in Western donor countries since the 1980s. Surprisingly, despite the anti-foreign aid views of neoliberal development approaches based on their unquestioning belief that free market mechanisms are the only and most efficient solution to poverty, official development aid has constantly increased and broken records over the past 50 years. If foreign aid is an intervention in the free market, does an increase in the amount and scope of foreign aid mean a move away from the basic principles of the neoliberal development approach? Or is there a change in neoliberal development approaches to foreign aid under the changing conditions of the global economy? The aim of this study is to examine the change and continuity in the perspective of neoliberal development approaches to foreign aid by analysing the discourses of neoliberal development literature on foreign aid and the foreign aid practises of donors that adopt neoliberal development prescriptions.
Neoliberal Kalkınma Yaklaşımlarında Dış Yardımın Rolü ve Etkisi
Yahya GülsevenDış yardımların yoksul ülkelerde kalkınma ve ekonomik büyümeye etkisi, akademik çevrelerde uzun yıllardır süregelen bir tartışma konusudur. İkinci Dünya Savaşı sonrası dönemin ilk yıllarından günümüze kadar, dış yardımların kalkınma ve ekonomik büyümeye etkisini değerlendiren birçok araştırma gerçekleştirilmiştir. Kalkınma iktisadı, uluslararası ilişkiler ve sosyoloji gibi pek çok farklı disiplinden gelen akademisyenlerin yürüttüğü bu araştırmaların sonuçları üzerinden yürüyen dış yardımın etkinliği tartışmalarında hala bir uzlaşı sağlanamamış; dış yardımların etkinliği konusunda bir fikir birliği oluşmamıştır. Dış yardıma yönelik eleştiriler, Bağımlılık Teorisi başta olmak üzere genellikle Marksist/eleştirel yaklaşımlar ile ilişkilendiriliyor olmasına rağmen, neoliberal düşünce de dış yardımlara sert eleştiriler yöneltmiştir. Ancak, dış yardımların fayda ve önemini sorgulayan neoliberal eleştirilere rağmen, yoksul ülkelere sağlanan dış yardımların miktarı ve kapsamı Batılı donör ülkelerde 1980’li yıllardan itibaren neoliberalizmin yükselişinden sonra da artarak devam etmiştir. Neoliberal kalkınma yaklaşımlarının, serbest piyasa mekanizmalarının yoksulluğun tek ve en verimli çözümü olduğuna dair sorgusuz inançlarına dayanan dış yardım karşıtı görüşlerine rağmen, geçtiğimiz 50 yıl boyunca resmi kalkınma yardımlarının sürekli artması ve rekorlar kırması şaşırtıcıdır. Eğer dış yardım serbest piyasaya bir müdahale ise, miktarı ve kapsamı giderek artan dış yardımlar neoliberal kalkınma anlayışının temel ilkelerinden bir uzaklaşma anlamına mı gelmektedir? Yoksa neoliberal kalkınma yaklaşımlarının dış yardımlara bakışında küresel ekonominin değişen şartları altında bir değişim mi söz konudur? Bu çalışmanın amacı neoliberal kalkınma literatürünün dış yardıma ilişkin söylemlerini ve neoliberal kalkınma reçetelerini benimseyen donörlerin dış yardım uygulamalarını analiz ederek, neoliberal kalkınma yaklaşımlarının dış yardıma bakış açısındaki değişim ve sürekliliği incelemektir.
Neoliberal development paradigms have long been associated with advocating for the primacy of free market principles and trade liberalisation as engines of economic growth and development in developing countries. Central to this ideology is the critique of foreign aid, which is often deemed to foster dependency and hinder progress. However, an intriguing paradox emerges when one scrutinises the actual practises within neoliberal frameworks. Despite rhetoric against foreign aid, approaches such as Aid for Trade and Global Value Chains underscore the pivotal role of aid in fostering trade and enabling participation in global markets.
This study explores this paradox by examining the discrepancy between the discourse and the practical use of foreign aid within neoliberal development approaches. Neoliberal development approaches have consistently criticised foreign aid on several grounds. First, aid dependency theory posits that continuous inflows of aid create reliance on aid, thus inhibiting self-sufficiency and sustainable development. Second, aid has been accused of perpetuating a cycle of poverty by distorting local markets and disincentivizing domestic entrepreneurship and investment. Finally, Neoliberalism’s emphasis on individual responsibility and market efficiency suggests that aid undermines these principles by fostering a culture of entitlement and handouts.
Aid creates dependency, hinders development, and should be eliminated. However, OECD data indicate that despite the rise of neoliberalism since the 1980s, foreign aid has continued to increase and has reached record levels in recent years. This discrepancy between the rhetoric surrounding neoliberal development approaches and their implementation highlights that foreign aid has not been phased out as advocated. Contrary to the discourse against foreign aid, the scope and amount of aid have significantly increased in the implementation of neoliberal development approaches. Rather than eliminating foreign aid, approaches such as Aid for Trade and Global Value Chains emphasise the necessity of foreign aid to enable poor countries to benefit from global trade and free market opportunities. Neoliberal development approaches have increasingly utilised foreign aid as a tool to facilitate trade in aid-recipient countries and integrate them into global value chains. Aid for Trade initiatives, for instance, aim to enhance the trade capacity and infrastructure of developing countries, thereby enabling them to participate more effectively in international trade. Similarly, the Global Value Chains approach recognises the importance of aid in upgrading production capabilities in poor countries and enhancing their competitiveness in global markets. These approaches acknowledge the structural barriers faced by developing countries and advocate targeted aid interventions to address these challenges. Paradoxical use of aid within neoliberal frameworks reflects a pragmatic acknowledgement of the limitations of market-led development strategies. While neoliberal rhetoric emphasises the virtues of self-reliance and market efficiency, but the realities of global economic dynamics necessitate a more nuanced approach. When strategically deployed, foreign aid can address market failures, alleviate structural constraints, and catalyse inclusive growth. Moreover, aid for trade initiatives aligns with neoliberal goals by promoting market access and enhancing export competitiveness, thereby facilitating the integration of developing countries into the global economy. The paradox of neoliberal development, where foreign aid is criticised in rhetoric but used in practise to foster trade and free-market mechanisms, highlights the complex interplay between ideology and pragmatism in development discourse.
While neoliberalism’s emphasis on market-led solutions remains influential, the pragmatic utilisation of aid underscores the need for flexibility and adaptation in responding to the diverse challenges of development. The discrepancy between neoliberal discourse and aid utilisation underscores the inherent tensions within development paradigms. Neoliberalism espouses a minimalist role for the state and emphasises individual agency; however, the practical realities of development often require state intervention and collective action. Similarly, while foreign aid has been critiqued ideologically, its instrumental role in fostering trade and market mechanisms cannot be ignored. Navigating these contradictions requires a pragmatic approach that balances ideological commitments with the imperatives of development effectiveness and poverty reduction.
