Editing Development aid (section)

== History ==
===Britain's development funding for its colonies===
The concept of development aid goes back to the [[British Empire|colonial era]] at the turn of the twentieth century, in particular to the British policy of colonial development that emerged during that period. The traditional government policy had tended to favor [[laissez-faire]] style economics, with the free market for capital and goods dictating the economic role that colonies played in the [[British Empire]].

[[Image:British Political Personalities 1936-1945 CH4432.jpg|thumb|250px|[[Walter Guinness, 1st Baron Moyne|Lord Moyne]], as [[Secretary of State for the Colonies]] presided over a Development Committee for the colonies. He is pictured entertaining [[Jamaica]]n recruits for the [[RAF]].]]
Changes in attitudes towards the moral purpose of the Empire, and the role that government could play in the promotion of welfare slowly led to a more proactive policy of economic and developmental assistance towards poor colonies. The first challenge to Britain was the [[economic crisis]] that occurred after [[World War I]]. Prior to the passage of the 1929 Colonial Development Act, the doctrine that governed Britain (and other European colonizers) with their territories was that of financial self-sufficiency. What this simply meant was that the colonies were responsible for themselves.<ref>Joseph Hodge, Gerald Hodl, & Martin Kopf (edi) Developing Africa: Concepts and Practices in Twentieth-Century Colonialism, Manchester: Manchester University Press, 2014, p.12.</ref>

Britain was not going to use the money that belongs to the [[metropole]] to pay for things in the colonies. The colonies did not only have to pay for infrastructural development but they also were responsible for the salaries of British officials that worked in the colonies. The colonies generated the revenues to pay for these through different forms of taxations. The standard taxation was the import and export taxes. Goods going out of the colonies were taxed and those coming in were also taxed. These generated significant revenues. Apart from these taxes, the colonizers introduced two other forms of taxes: hut tax and labor tax. The hut tax is akin to a property tax today. Every grown up adult male had their own hut. Each of these had to pay a tax. Labor tax was the work that the people had to do without any remunerations or with meager stipends.<ref>Bekeh Utietiang, Planning Development: International Experts, Agricultural Policy, and the Modernization of Nigeria, 1945-1967 (Ph.D Thesis), West Virginia University, Morgantown, 2014, p. 38.</ref> As the [[Financial crisis|economic crisis]] widened and had significant impact on the colonies, revenues generated from taxes continued to decline, having a significant impact on the colonies. While this was going on, Britain experienced major unemployment rates. The parliament began to discuss ways in which they could deal with Britain's unemployment rates and at the same time respond to some of the urgent needs of the colonies.<ref>[[Stephen Constantine (historian)|Stephen Constantine]], ''The Making of British Colonial Development Policy, 1914-1940'', London: Frank Cass, 1984, p.183.</ref> This process culminated in the passage of the Colonial Development Act in 1929, which established a Colonial Development Advisory Committee under the authority of the [[Secretary of State for the Colonies]], then [[Sidney Webb, 1st Baron Passfield|Lord Passfield]]. Its initial annual budget of £1 million was spent on schemes designed to develop the [[infrastructure]] of [[transport]], [[electrical power]] and [[water supply]] in colonies and [[dominion]]s abroad for the furtherance of imperial trade.<ref name="Kanbur">{{Citation |last1=Kanbur |first1=Ravi |title=Handbook of the economics of giving, altruism and reciprocity: foundations, volume 1 |year=2006 |postscript=. |editor-last1=Kolm |editor-first1=Serge-Christophe |editor-last2=Ythier |editor-first2=Jean Mercier |contribution=The economics of international aid |location=Amsterdam London |publisher=Elsevier |isbn=9780444506979 |author-link1=Ravi Kanbur |editor-link1=Serge-Christophe Kolm}}</ref> The 1929 Act, though meager in the resources it made available for development, was a significant Act because it opened the door for Britain to make future investments in the colonies. It was a major shift in colonial development. The doctrine of financial self-sufficiency was abandoned and Britain could now use metropolitan funds to develop the colonies.

By the late 1930s, especially after the [[British West Indian labour unrest of 1934–1939]], it was clear that this initial scheme was far too limited in scope. A [[Royal Commission]] under [[Walter Guinness, 1st Baron Moyne|Lord Moyne]] was sent to investigate the living conditions in the [[British West Indies]] and it published its [[Report of West India Royal Commission (Moyne Report)|Report]] in 1940 which exposed the horrendous living conditions there.<ref>{{cite journal |last=Fraser |first=Cary |year=1996 |title=The Twilight of Colonial Rule in the British West Indies: Nationalist Assertion vs. Imperial Hubris in the 1930s |url=http://connection.ebscohost.com/c/articles/45526514 |journal=Journal of Caribbean History |volume=30 |issue=1/2 |page=2}}{{Dead link|date=November 2019|bot=InternetArchiveBot|fix-attempted=yes}}</ref><ref>{{cite journal |last=Basdeo |first=Sahadeo |year=1983 |title=Walter Citrine and the British Caribbean Worker's Movement during the Commission Hearing |url=http://web.ebscohost.com/ehost/results?sid=2784e56a-6ebf-4f20-9439-1158ddf4d76c%40sessionmgr4&vid=11&hid=28&bquery=(AU+(basdeo))+AND+(citrine)&bdata=JmRiPWFobCZkYj1oaWEmdHlwZT0xJnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d |journal=Journal of Caribbean History |volume=18 |issue=2 |page=46}}{{Dead link|date=January 2020|bot=InternetArchiveBot|fix-attempted=yes}}</ref>

Amidst increasing criticism of Britain's colonial policies from abroad and at home,<ref>{{cite book |last=Thomas |title=The Trinidad Labour Riots of 1937 |page=229}}</ref><ref>{{cite book |last=Singh |first=Kelvin |url=https://books.google.com/books?id=iWAYAAAAYAAJ |title=Race and Class Struggles in a Colonial State |publisher=University of Calgary Press |year=1994 |isbn=9781895176438 |location=Calgary |page=186}}</ref> the commission was a performance to showcase Britain's "benevolent" attitude towards its colonial subjects.<ref name="Thomas267">{{cite book |url=https://books.google.com/books?id=Re3TAAAAMAAJ |title=The Trinidad Labour Riots of 1937 |publisher=University of West Indies Press |year=1987 |isbn=9789766200022 |editor-last=Thomas |editor-first=Roy Darrow |location=St. Augustine |page=267}}</ref> The commission's recommendations urged health and education initiatives along with increased sugar subsidies to stave off a complete and total economic meltdown.<ref>{{cite book |last=Parker |page=23}}</ref> The [[Colonial Office]], eager to prevent instability while the country was at [[World War II|war]], began funneling large sums of cash into the region.<ref name="Thomas283">{{cite book |last=Thomas |title=The Trinidad Labour Riots of 1937 |pages=283}}</ref>

The Colonial Development and Welfare Act was passed in 1940 to organize and allocate a sum of £5 million per year to the [[British West Indies]] for the purpose of long-term development. Some £10 million in loans was cancelled in the same Act.<ref>{{cite book |last=Bolland |title=The Politics of Labour in the British Caribbean |page=383}}</ref> The Colonial Development and Welfare Act of 1945 increased the level of aid to £120m over a twenty-year period. Further Acts followed in 1948, 1959 and 1963, dramatically increasing the scope of monetary assistance, favourable [[interest rate|interest-free]] [[loan]]s and development assistance programs.

===Postwar expansion===
[[File:Marshall Plan poster.JPG|thumb|A poster promoting the [[Marshall Plan]] in Europe, the first large scale development program. It was designed to boost European economies shattered by [[World War II|war]] and prevent the growth of [[communism|communist]] influence.]]

The beginning of modern development aid is rooted in the context of Post-[[World War II]] and the [[Cold War]]. Launched as a large-scale aid program by the United States in 1948, the European Recovery Program, or [[Marshall Plan]], was concerned with strengthening the ties to the [[West Europe]]an states to contain the influence of the [[USSR]]. Implemented by the [[Economic Cooperation Administration]] (ECA), the Marshall Plan also expanded its reconstruction finance to strategic parts of the Middle East and Asia.<ref name="Httpwwwusaidgovabout_usaidusaidhisthtml">{{cite web |title=USAID: USAID History |url=http://www.usaid.gov/about_usaid/usaidhist.html |url-status=dead |archive-url=https://web.archive.org/web/20111009131110/http://www.usaid.gov/about_usaid/usaidhist.html |archive-date=9 October 2011 |access-date=12 March 2011 |publisher=[[USAID]]}}</ref>

Although Marshall aid was initially offered to Europe in general, the Soviet Union forbade its neighbouring states from accepting it. This has been described as "the moment of truth" in the post-[[World War II]] division of Europe.<ref name="bideleaux">Bideleux, Robert and Ian Jeffries, ''A History of Eastern Europe: Crisis and Change'', Routledge, 1998, {{ISBN|0-415-16111-8}}</ref> The Soviet Union provided aid to countries in the communist bloc; for instance, on Poland's abstention from the Marshall Plan, [[Joseph Stalin|Stalin]] promised a $450 million credit and 200,000 tons of grain.<ref>{{cite news |date=9 February 1948 |title=Carnations |url=https://content.time.com/time/subscriber/article/0,33009,855998,00.html |url-status=live |archive-url=https://web.archive.org/web/20090114182613/http://www.time.com/time/magazine/article/0,9171,855998,00.html |archive-date=14 January 2009 |access-date=2 March 2021 |magazine=[[Time (magazine)|Time]]}}</ref>

In January 1949 the inaugural address of U.S. president [[Harry Truman]] announced an extension of aid to "underdeveloped areas" in the form of technical assistance.<ref>{{Cite web |last=Truman |first=Harry S. |title=Inaugural address of Harry S. Truman |url=https://avalon.law.yale.edu/20th_century/truman.asp |url-status=live |archive-url=https://web.archive.org/web/20081027211730/http://avalon.law.yale.edu:80/20th_century/truman.asp |archive-date=27 October 2008 |access-date=2 March 2021 |website=The Avalon Project}}</ref> While the main theme of the speech was strengthening the free world against communism, in his [[Point Four Program|fourth point]] Truman also appealed to the motives of compassion and pride in civilization. "For the first time in history, humanity possesses the knowledge and skill to relieve the suffering of these people."<ref>[http://www.bartleby.com/124/pres53.html Transcript of the speech]</ref> The United Nations followed up the US initiative later that year by setting up an Extended Programme of Technical Assistance (EPTA) to help pool international donor funds for technical assistance and distribute them through UN agencies.<ref name=":27">{{Cite web |title=United Nations. Extended Programme of Technical Assistance - UNESCO Archives AtoM catalogue |url=https://atom.archives.unesco.org/united-nations-extended-programme-of-technical-assistance |access-date=6 March 2021 |website=atom.archives.unesco.org}}</ref> EPTA was a precursor of [[United Nations Development Programme|UNDP]].<ref name=":27" />

U.S. aid for development in the 1950s came to include grants and concessional loans as well as technical assistance. This development aid was administered alongside military aid within the framework of the [[Mutual Security Act]].<ref>{{Cite journal |last=Haviland |first=H. Field |date=September 1958 |title=Foreign Aid and the Policy Process: 1957 |url=https://www.cambridge.org/core/journals/american-political-science-review/article/abs/foreign-aid-and-the-policy-process-1957/0AF9B1AF4123FFF21DF8E06791A51269 |journal=American Political Science Review |language=en |volume=52 |issue=3 |pages=689–724 |doi=10.2307/1951900 |issn=1537-5943 |jstor=1951900 |s2cid=144564474|url-access=subscription }}</ref><ref>{{Cite journal |last=Morgner |first=Aurelius |date=1967 |title=The American Foreign Aid Program: Costs, Accomplishments, Alternatives? |url=https://www.jstor.org/stable/1405813 |journal=The Review of Politics |volume=29 |issue=1 |pages=65–75 |doi=10.1017/S0034670500023731 |issn=0034-6705 |jstor=1405813 |s2cid=145492668|url-access=subscription }}</ref> But for most of the decade there was no major multilateral body to provide concessional loans. An initiative to create such a body under the UN met with resistance from the U.S. on the grounds that it was premature. Accordingly, when the UN's "Special Fund" was created at the end of 1958, its remit was only for technical assistance not loans.<ref>{{Cite journal |last=Manzer |first=Ronald A. |date=1964 |title=The United Nations Special Fund |url=https://www.jstor.org/stable/2705530 |journal=International Organization |volume=18 |issue=4 |pages=766–789 |doi=10.1017/S0020818300025315 |issn=0020-8183 |jstor=2705530 |s2cid=153645652|url-access=subscription }}</ref> (The Special Fund was differentiated from EPTA by assisting public infrastructure rather than industrial projects.)

In 1959, a significant annual amendment to the Mutual Security Act declared that it was "a primary objective of the United States" to assist "the peoples of other lands who are striving to establish and develop politically independent and economically viable units".<ref name=":28">{{Cite web |title=Public Law 86-108, July 24,1959 |url=https://www.govinfo.gov/content/pkg/STATUTE-73/pdf/STATUTE-73-Pg246.pdf#page=1 |url-status=live |archive-url=https://web.archive.org/web/20200712130032/https://www.govinfo.gov/content/pkg/STATUTE-73/pdf/STATUTE-73-Pg246.pdf |archive-date=12 July 2020 |access-date=9 March 2021 |website=www.govinfo.gov}}</ref> This shifted the emphasis of U.S. economic aid away from immediate Cold War security needs, towards supporting the process of dismantling the empires of the UK, France and other European colonial powers. The amendment also made clear that Congress expected those industrialized nations which had been helped by U.S. aid to rebuild after the war would now share more of the burden of helping less-developed countries.<ref name=":28" />

Following on, the U.S. encouraged the Organisation for European Economic Cooperation (OEEC) to set up a Development Assistance Group (DAG) composed of the main donor states, in order to help coordinate their aid. This was done in January 1960. The following year the DAG adopted a "Resolution of the common aid effort", vowing to increase the volume of aid, and to share the task equitably. Shortly after this, the OEEC was succeeded by the [[OECD]], expanding its scope from Europe to the world, and embracing a particular concern with less-developed countries. The DAG became the [[Development Assistance Committee]] (DAC).<ref name=":29">{{Cite web |last=Führer |first=Helmut |date=1994 |title=The story of Official Development Assistance |url=https://www.oecd.org/dac/1896816.pdf |url-status=live |archive-url=https://web.archive.org/web/20130526011653/http://www.oecd.org/dac/1896816.pdf |archive-date=26 May 2013 |access-date=9 March 2021 |website=[[OECD]]}}</ref>

1960 also saw the creation of a multilateral institution to provide soft loans for development finance. The [[International Development Association]] (IDA) was created as part of the World Bank (over which the U.S. and other Western countries exerted more influence than they did over the UN).<ref>{{Cite web |title=History |url=https://ida.worldbank.org/about/history |url-status=live |archive-url=https://web.archive.org/web/20160422003753/http://ida.worldbank.org:80/about/history |archive-date=22 April 2016 |access-date=6 March 2021 |website=[[International Development Association]]}}</ref>

In 1961 several Western states established government departments or agencies to administer aid, including [[United States Agency for International Development|USAID]] in the United States.<ref name=":29" />

In 1960 the USA was providing half of all aid counted by the OECD. This proportion increased to 56% by 1965, but from 1965 to 1973 (the year of the [[1973 oil crisis|oil price crisis]]), the volume of U.S. aid generally declined in real terms (though it increased in nominal terms, due to inflation). The other OECD-DAC members meanwhile generally increased their aid, so that the total volume of OECD aid was fairly constant up to 1973.<ref>See chart on the right. Data from [https://stats.oecd.org OECD.Stat].</ref>

=== After the Cold War ===
The quantity of ODA dropped sharply in the seven or eight years after the fall of the Berlin wall (1999-2007).<ref name=":30">{{Cite web |last1=Severino |first1=Jean-Michel |last2=Olivier |first2=Ray |date=1999 |title=The End of ODA: Death and Rebirth of a Global Public Policy |url=http://www.cosv.org/download/centrodocumentazione/End_of_ODA_FINAL.pdf |url-status=live |archive-url=https://web.archive.org/web/20210416032310/http://www.cosv.org/download/centrodocumentazione/End_of_ODA_FINAL.pdf |archive-date=16 April 2021 |access-date=15 April 2021 |website=Center for Global Development}}</ref>

The turn of the 21st century saw a significant proliferation and diversification in aid donors and non-governmental actors. The traditional donors in the DAC have been joined by [[emerging economies]] (China, India, Saudi Arabia, Turkey, Brazil, Venezuela, etc.), some of which are still receiving aid from Western countries. Many of these new donors do not feel compelled to conform to traditional donors' norms.<ref>Park, K., "New Development Partners and a Global Development Partnership". In Kharas, H., Makino, K., Jung, W. ''Catalizing Development'', Brooking Institution Press, Washington D.C. 2011.</ref> Generally demanding [[conditionality]] in return for assistance, which means tying aid to the procurement of goods and services, they are challenging traditional development aid standards.<ref>Kragelund, P. "The Potential Role of Non-Traditional Donors' Aid in Africa", International Center for Trade and Sustainable Development, 2010.</ref>

Multinational corporations, philanthropists, international NGOs and civil society have matured into major players as well. Even though the rise of new development partners had the positive effect of bringing an increased variety of financing, know-how and skills to the development community, at the same time it has shaken up the existing aid system.<ref name=":30" />