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Political Economy and the Aid Industry in Asia

22 Jun 2015
reviewer Joanna Pradela

For most, it would be no long stretch of the imagination to conceive of transformational change as non-linear and contestable.  Nor would it be surprising to assume that such change requires trading off gains in one area for costs in another.  While none of this is particularly remarkable, the authors of the text point out with (alarming!) accuracy that too often we ignore these truths when it comes to overseas development in other countries.

This book goes on to propose a theory, which the authors term ‘structural political economy analysis’ (SPEA), that they believe will better assist policy-makers and practitioners of overseas aid programs (aid programs as distinctly different from development, which is viewed in SPEA as an historical outcome of many contests and negotiations over the trajectory of society).  They contrast their theory with other political economy approaches, making quick work in the first half of the book of outlining drivers of political economy analysis and development agencies and highlighting their (inevitable) shortcomings.

The most interesting part of the text is the debunking of two popular aid conceptions when it comes to development bureaucracies and their interest in working politically.  The first is that development can be conceived of as a public good.  The second is that identifying and nurturing reformers will help you achieve development

On the first point, the authors remind the reader that transformational change is contestable. This contrasts with the idea of development as a public good, those goods that economists call non-excludable and non-rivalrous, meaning that the use by one doesn’t reduce or exclude the use by another.  In a conception of development as a public good, the authors point out that contestation is seen as a dysfunction of the system in which conflicting interests must be resolved so as to advance the realization of development.  This view lends itself towards addressing reform of institutions and finding technical fixes (and supporting technocrats as the drivers of reform).  In the theory being advanced in the book, however, contestation is part of a normal society and will never be eradicated.  Development is, therefore, the outcome of a series of contestations over the long term.  Aid programming is what practitioners do—limited interventions in the contests, negotiations and trajectory of an evolving social order.

If you accept this re-conception of development not as a public good but as an idea over which there are competing notions and interests, then a re-evaluation of the second point, regarding identification and nurturing of reformers as a suitable means to achieving development, should necessarily follow–as it does in this text.  Here the authors quickly revert to a Hobbesian conception of man in the state of nature, identifying that the status quo often serves the interests of the power-holders and thus, reformers often lack the influence to bring reform to bear.  Instead, the authors outline a typology of reformers, non-reformers and the types of alliances they may enter into  to achieve gains, if not outright wins, for development.

The authors then use a series of case studies from the Asian region to demonstrate their theory of structural political economy analysis (SPEA).

In some ways, SPEA is the truth that practitioners and policy-makers actively avoid: interventions in someone else’s country are always fraught, unlikely to be universally appreciated and require trade-offs.  Development bureaucracies are usually cautious about being viewed as overtly political and making political interventions in other countries (even though all aid programs tacitly are political interventions).  Theories of development as a public good or institutional reform and governance programming are grand narratives that have enabled practitioners and policy-makers to work around the margins of politics and to feel as though programming is making a positive difference in the achievement of non-rivalrous outcomes.  The trouble with moving away from these theories is that if we were honest about the limitations of aid interventions, we might not make them at all, or at least not through aid bureaucracies.

And that makes the timing of this book’s release impeccable, perhaps opportunistic, as Australia’s aid program has so recently been subsumed into the Department of Foreign Affairs and Trade (DFAT).  What aid bureaucrats can be squeamish about, diplomats are not.  Diplomacy is political; it enters into the fray and makes no apologies for being the voice of its own interests and is more comfortable with opportunism.  Bringing these qualities to Australia’s development strategic analysis would be a great strength and something that the joined up DFAT can now avail itself of.

A few other opportunistic tones creep into the text but overall the book makes for an interesting, though somewhat depressing read of whether and how change will come about for the poorest.  And while its hard to imagine it will become a field guide for those slogging away in developing contexts or even for policy-makers caught in the short-termism of domestic political cycles, it is an important contribution to the literature.  The book provides a solid theory, demonstrates application against case studies and stays true to its title by focusing on the Asian region—something few development texts do well.

Structural political economy analysis throws into stark relief the concept of development and poverty eradication as a moral issue and instead presents it as a look at structures of power and how context can be leveraged to make (limited) development gains.  The authors remind the reader that the truth of the matter is that aid programming requires tactical alliances and opportunism to make short-term steps forward.  The battles we win with aid programs may fall very short of our full desire for reform and the war; well, we’ll have to wait and see if we had any influence on the outcome at all.

Jane Hutchison, Wil Hout, Caroline Hughes and Richard Robison, Political Economy and the Aid Industry in Asia, Palgrave Macmillan, 2014

Joanna Pradela is the Head of Policy at the Australian Council for International Development (ACFID). The views and opinions expressed in this review are the author’s own and do not necessarily reflect the views of ACFID and its members.