What are the differences and similarities between the USA’s and UK’s approaches to governance and aid effectiveness? How have contradictions in aid analysis, policy and partnership contributed to the similarities? This working paper from the Global Poverty Research Group (GPRG) contrasts the approaches of the White House led Millennium Challenge Account (MCA) and the UK Department for International Development’s (DFID) Drivers of Change (DOC) to analysing governance.
It is increasingly argued that political analysis and effective governance are central to understanding and reducing poverty. For the USA, however, global poverty reduction is secondary to its foreign policy agenda, whereas in the UK, it engages both politicians and civil society. The USA has a complex institutional landscape for aid administration, whilst British aid administration is the responsibility of a single government department (DFID). Furthermore, American aid has always been tied and project-based whereas DFID advocates programme aid and direct budget support. Despite these differences, however, enduring contradictions confronted by all donors may mean that MCA and DOC will not be that different when practised.
MCA and DOC are based on distinct conceptualisations of how governance is understood, addressed and incorporated:
- MCA is designed to improve the allocation and delivery of US foreign assistance programmes. It is heavily focussed on economic growth and poverty reduction and based on pristine selectivity. MCA espouses a business-like, time bound, target oriented approach underpinned by contractual obligations.
- DOC is based on the proposition that reducing poverty requires intervening in historical processes and not simply rational planning. Governance is conceptualised as a phenomenon mediated by the interaction of agents, structures and institutions. It suggests that the initial focus should be on significant change, and not pro-poor change.
- DOC faces a number of tensions: between incremental change and the need for ambitious rhetoric on aid and poverty; between the need for a greater understanding of domestic politics and the danger in being explicit about such an understanding; and between understanding particular institutions, agents and structures driving change, and actually addressing them.
- Different historical, political, ideological and institutional conditions underpin the approaches in the USA and the UK: their perspectives on global leadership for poverty reduction; the nature of their civil societies; and the relative degree of autonomy of their aid programmes.
Difficulties in pursuing an alternative, empirically grounded approach in aid policy mean that DOC is actually similar to MCA in three respects:
- All donors seek a practicable framework for action, as exemplified by MCA. DOC also uses a standardised conceptual framework to understand different political systems and governance arrangements. This limits space for analysis of how complex social processes account for unequal relations, locally and globally.
- All donors need to be selective. With MCA this is informed by subjective interpretations of quantitative data and the dominance of strategic interests. Despite the qualitative nature of DOC analyses, they may simply be used to cope with pre-determined decisions. In both cases, donors may be constrained by overriding concerns such as human rights violations.
- All donors need to produce outcomes. Whilst MCA takes an overtly results-oriented approach, DOC also suffers pressure to meet immediate targets. In addition, both may unleash processes that work in the interests of elites.