Archive for March, 2009

Making Aid Work?

Abhijit Vinayak Banerjee (2007) Making Aid Work. Cambridge, MA: MIT Press. 170pp, £9.95, 978 0 262 02615 4


Abhijit Vinayak Banerjee’s Making Aid Work provides an excellent forum to discuss the problems engulfing international development aid. It argues that the ineffectiveness of foreign development aid is primarily due to “institutional laziness” (p.7). Banerjee argues that international donor agencies, NGOs and multilateral institutions do not pay much attention to the impact and “cost-effectiveness” (p.16) of a program and are often “unclear about what they should be pushing for” (p.21). Building on the drugs evaluation model, Banerjee argues that “randomized trials… are the simplest and best way of assessing the impact of a program” (p.10). Although “randomized trials are not perfect” (p.11), argues Banerjee, they provide “hard evidence” (p.113) and “spur[s] innovation by making it easy to see what works” (p.122).



The problems of foreign aid, as recognized by Banerjee, have been universally agreed upon by several economists and policy makers. However, his arguments on lazy thinking and randomized experiments have received skeptical responses. Many have rejected his accusations that the international donors are not pursuing impact evaluation and cost-benefit analysis. Banerjee’s argument is very limited and ambiguous. His academic training in economics influences much of his thinking on macro level quantitative experimentation, ignoring the dynamics of power relations at the grassroots level. He also fails to explain the idea of randomized experiment in a clear manner. His emphasis on laziness (not filling up a form) that is grounded on a particular example from Pakistan does not really apply to regular NGO functioning. As Mick Moore has rightly argued, development agencies are “staffed and run by expressive intellectuals” who are “skilled in performing the key functions of the contemporary aid business: producing position papers and strategy documents and managing inter-agency coordination meetings” (p.43).


By placing the emphasis on institutions, Banerjee has failed to address the “politics” of development and international aid, which often has created a “culture of dependency” at the grassroots level. Banerjee is also unable to understand that the problem of foreign aid is not primarily due to “institutional laziness” but the result of a rationalized and active institutional effort to depoliticize development and to create what James Ferguson (1990) has called an “anti-politics machine”. Nevertheless, Banerjee’s arguments have generated numerous pertinent issues and discussions related to the aid regime. His concluding essay has brilliantly addressed the machine like character of development policy making. The structure of the book is innovative, although the forum discussions are regrettably brief. 


This review has been published by Sarbeswar Sahoo in Political Studies Review, Vol. 7, No. 1, January 2009