What Next for US Aid in Ethiopia?

By IndepthAfrica
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Aug 28th, 2012
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By Sarah Jane Staats

The death of Ethiopian Prime Minister Meles Zenawi after twenty-one years in charge raises fresh questions about the future of US foreign aid to the country – including all three of President Obama’s development initiatives – and the conundrum of focusing aid in countries whose leaders hang on to power for more than a decade. Could a new rule banning foreign aid to long-serving heads of state help?

Ethiopia is:

The United States is Ethiopia’s largest bilateral donor, allocating close to $800 million in FY2011 ($570 million plus emergency food aid funding).  In their Engagement Amid Austerity report, Connie Veillette and John Norris highlighted the complex aid and security relationship between the United States and Ethiopia. They argued the United States “could be making a dangerous long-term bet with its assistance dollars by placing so little emphasis on governance in Ethiopia” and said US policymakers should limit expectations for future development results.

What next:

Meles’s death may unveil the results of the United States’ development bet in Ethiopia. US policymakers and aid watchers are paying close attention to the transition of power and the future of US presidential development initiatives in the country. And they’re hoping Kenyan Prime Minister Ralia Odinga’s fears that instability will fill the void left by Ethiopia’s strongman won’t be realized.

A new rule for aid selectivity?

It’s understandable why the United States and other donors cultivate aid partnerships with long-serving heads of state. But there are risks to such an approach—for the donor and in terms of the impact on the recipient country—and these are most obvious when there is a sudden leadership change, as has happened now in Ethiopia.

Could these risks be avoided if the United States and other donors refused to provide aid to low-income countries with leaders in power for longer than three terms or twelve years? My colleague Nicolas van de Walle urges donors to do just that. His empirical research shows the longer a leader is in power, the less likely he is to lose power or govern well. He explained in a January 2011 blog post:

The risk of losing power for a head of state declines over time: the longer a leader is in power, the less likely he is to  lose power in the next year, no matter how long he has been in power (and, he is the right pronoun here: they are nearly always men).  Over time, they get better at staying in power. Nonetheless, it is also true that the longer a dictator is in power, the less well he  governs.

That is why I have long argued that the imposition of presidential term limits is perhaps the single most important measure to improve the governance and economic performance of developing countries.  I have recommended that the Western donors send a strong signal that “presidents for life” are no longer acceptable by withholding foreign aid to any low-income country with a leader in power longer than three terms or 12 years. Such a policy would directly concern such close US allies and aid recipients as presidents Meles in Ethiopia (in power since 1995), Museveni in Uganda (since 1986), or Biya in Cameroon (since 1982).

Burkina Faso’s Blaise Compaoré (in power since 1987) and Rwanda’s Paul Kagame (in power since 2000) could be added to the list. Right now, Burkina Faso has an aid compact with the Millennium Challenge Account and Rwanda is a partner country in Feed the Future and the Global Climate Change Initiative. (There are fifteen African countries whose leaders have been in power for more than twelve years; thirteen receive some form of US foreign assistance; although in several cases the aid is primarily for humanitarian purposes and delivered outside government channels.)

In an era of budget austerity and given the Presidential Policy Directive on US Global Development that urges greater selectivity in US development spending, could this be a good place to start changing the way (or where) the United States gives aid? At a minimum, the MCC board could, and should, consider the 12-year rule when selecting countries as eligible for its good-governance-approved assistance.

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