The impact of donor and recipient government policies and practices on the effectiveness of foreign aid to a middle income developing country : case studies from Jordan

Abstract

This research investigates the foreign aid policies and practices of donor countries and of Jordan, a middle-income aid recipient country, through an examination of case studies of recent aid provision to Jordan. It examines the bearing of these policies on the effectiveness and efficiency of aid projects. The research concentrated on four case studies carefully chosen by the criteria of different donor nations and policies; and the different nature of the projects that cover the four main areas of development needs for Jordan. The case studies consisted of analysis of documentation and outcomes, and significant interviews with the selected participants. The case studies were chosen to explore the different mission statements, policies and practices and included the GTZ- funded Petra Stone Preservation Project, the USAIDfunded ICT Initiative, the DFID-funded Capacity Building in the Management of Jordan’s Education Services Project, and the JICA-funded Improvement of Water Supply System to Greater Amman Project. The study examines the effectiveness of aid in poor policy environments. It shows that the role of donors in ensuring the effectiveness of the aid they present goes beyond selecting recipients based on their policies and governance. Indeed, foreign aid is not donor-neutral and its effectiveness is not only dependent on the quality of governance and institutions of the recipients. The research demonstrates that a donor’s national interests and the influence of stakeholders determine the course and benefits of aid, and that judgements of success or failure vary between the standpoints of the donor and the recipient. The study investigates the impact of a number of variables on the effectiveness of foreign aid. Those variables include aid project design and delivery mechanisms, and institutional capacity and cultural constraints of aid recipients. The research focuses on relationships between donors and recipients and the differences in interests and objectives. It also looks at the impact of conditionality and tied aid on the sustainable benefits of the aid intervention. ii Although existing literature does address some of these considerations, there is very little direct evidence which links development theory with detailed practical examples. Where such examples are available, they are invariably weighted heavily by evidence which originates with, and is interpreted through, donor perceptions. This study provides a balanced analysis of four initiatives taking account of both donor and recipient expectations, experiences and assessments.

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