POMED Notes: The Role of Democratic Accountability in Development Assistance

On Monday, the Open Society Institute convened a panel of experts to discuss “The Role of Democratic Accountability in Development Assistance,” based in part on the coordinated release of Freedom House’s annual Countries at the Crossroads report. Brian Atwood, the Chair of the OECD Development Assistance Committee and former USAID Administrator, delivered a keynote address following a moderated conversation between Vanessa Tucker, the project director for Countries at the Crossroads 2012, Alicia Mandaville, Managing Director of Development Policy and country selection at the Millennium Challenge Corporation, David Yang, Director of USAID’s Center of Excellence on Democracy, Human Rights and Governance, and Joseph Siegle, Director of Research at the Africa Center for Strategic Studies. David Kramer, the President of Freedom House, and Daniel Yohannes, the CEO of the Millennium Challenge Corporation delivered opening remarks.

For full event notes, continue reading below or click here for the PDF version.

Kramer opened the event by lauding the new Countries at the Crossroads report, which he said is more important than ever in light of recent upheavals and political shifts around the world. Kramer knew Amb. John Stevens, the American Ambassador to Libya who was killed in Benghazi last Tuesday, and Kramer affirmed that Stevens would not want the U.S. Government to use his death as an excuse to disengage from the Arab world. Turning to the substance of the day’s panel, Kramer said that democracy and development feed off one another in a “virtuous circle.” Democracy in this case includes competitive elections as well as the rule of law, strong institutions and anti-corruption measures. Kramer singled out the “China Model”—anti-democratic institutions and rapid economic growth—as the single greatest threat to the democracy-development feedback loop, but he said that even in China, the “China Model” is under attack from citizens who are demanding civil rights and government accountability.

Yohannes reaffirmed the proven link between accountable governance and economic growth, which is why the MCC adopted a strict democratic rights qualification for MCC partner countries this year. The MCC will not distribute grant money to a country that does not meet certain civil and political rights hurdles, as measured in part by Countries at the Crossroads. To demonstrate the real-world value of this new guideline, Yohannes explained that within 90 days of MCC’s decision to cut off Malawi’s grant due to civil rights infractions, Malawi had reversed many of the objectionable regulations and sparked fresh economic growth.

In the panel discussion that followed, Tucker said that the new Freedom House report offers a “holistic view of governance,” a kind of “CliffsNotes” for donors who wish to evaluate the suitability of a particular foreign partner. The Freedom at the Crossroads report does this by tracking a range of diagnostics that fit roughly into four categories: public voice, civil liberties, security forces, and anti-corruption and enforcement mechanisms.

Mandaville said that the Freedom at the Crossroads report helps MCC “monitor governments over time” and informs MCC’s “painful decision” to walk away from those countries who “backslide” in the realms of democratic institutions and safeguards for individual rights.

Yang said that the linkage of democratic governance and development is “in the air,” helping the integrated concept of “human development” to gain traction in development agencies around the world. Democratic governance is no longer a “secondary thing” for USAID administrators and other development professionals; USAID brings to bear many mechanisms intended to strengthen “vertical and horizontal accountability” in both authoritarian and democratic states. Although Yang was insistent that USAID has the same goals and methods for providing aid in both types of states, he also said that USAID is always very careful “not to empower the government at the expense of the people” in authoritarian systems. In accordance with the Paris Protocols, USAID seeks to promote individual empowerment as much as possible in each of its projects.

Siegle reminded the audience that “democratic accountability” is not the same as “democracy”: “democratic accountability” includes the institutional protection of civil rights, checks on the executive, an effective judiciary, and a free press, as well as credible elections. Elections alone do not have an impact on economic growth but democratic institutions boost economic output by 30-percent on average, according to Siegle. Siegle also affirmed that development is inevitably a political process in that it influences power relationships and domestic priorities, so it is imperative that development professionals always consider political realities.

In the brief Q & A session that followed, Yang discussed the lessons of the Arab Spring for development professionals. He said that the story of Egypt and Tunisia proves that “you can’t distinguish between political dignity and economic dignity—one can’t succeed without the other.” USAID is using “every means of persuasion” to promote human rights and accountability in the post-revolutionary Arab world. The Open Government Partnership shows that many countries are adopting this new position as part of their own aid programs, including Mexico, Brazil, and the Philippines, according to Yang. Tucker said that the international community must “look through the smoke and mirrors” to monitor the nascent democracies in Tunisia and Egypt because “foreign governments know the language” of democratic accountability and are adept at hiding corruption and authoritarianism under a veneer of modernization. Tucker said that Tunisia is busy getting rid of former President Ben Ali’s anti-democratic regulations, while Egypt must be more concerned with building up new, credible democratic institutions.

Atwood began his keynote address by acknowledging that “the line between conditionality and selectivity is a thin one” and that aid agencies will always face charges of playing politics and intervening in internal affairs. However, Atwood continued, no government has the right to keep its citizens in poverty. Aid agencies and foreign governments cannot reconcile internal tensions, but they can help people find their own voice and take ownership over their own development. The internet revolution unleashed a “new wave of democracy,” and although pent up emotions can be dangerous when finally unleashed, Atwood insisted that the international community has a responsibility to support the democratic process. Atwood cautioned that of the $130 billion in international aid, less than ten percent is spent on democratic governance, including only two percent for anti-corruption measures and political party strengthening. Foreign governments cannot import pre-packaged aid programs from abroad, but must instead work with partner governments and CSOs to design holistic development and good-governance programs. Atwood called for engagement with all allies for peaceful change around the world, but he ended on a sour note, arguing that “not much has changed” in the provision of development and democratization assistance.