Non-Official Development Aid: Key Benefits for Nations - Essay Sample

Introduction

The non-official development assistance is significant to a particular nation because they cover the following, the diplomacy interest such as military basis establishment, and supporting regimes. The security interest, for example, preserving the security of the country against terrorist attack and commercial importance. For instance, export support as well as social issues like poverty alleviation, by financing school, infrastructure, health services, and business development. It becomes difficult for non-official development assistance to share risks and handle uncertainty due to the lack of trusted people to initiate growth and failure to achieve their promises. Various governance issues impact them like corruption in authorities, political change, and instability and lack of awareness of the places they need to develop. Hence, the paper analyses the governance problems impacting the non-official development assistance and effect on Liberian development agenda.

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Governance Issues Affecting Non-Official Development Assistance

Political change has influenced the non-official development assistance in Liberia. Citizens in luxurious places pay tax to the government, which is used in developing the marginalized regions. The levies collected are useful in beginning various projects like education, health facilities, and giving food relief to the vulnerable. The wealthy nation's government grant or lend money to the weak countries authorities to implement policies and programs designed to reduce poverty. The multilateral agencies minimize the transaction costs and give co-ordination expertise to ensure the programs and projects are designed properly. The rise in multilateral and bilateral donors in Liberia has minimized non-official development assistance because they reduce the incidences of poverty. Also, change on decentralization reforms increased unaccountability among government officials since they began misusing the financial donations instead of development discouraging non-official development aid individuals (Hilton, 2018).

Lack of government transparency and accountability affects the non-official development assistance. Corruption is a threat since no system, whether political, economic, and administrative can function efficiently and effectively. They are integrating accountability into action results in efficient use of personal and financial resources and cost reduction. Hence, the threats to development aid disbursement are governmental corruption (Langlotz & Potrafke, 2019). These include social and political unaccountability, national bureaucracies and administrative and in terms of delivery of public services to the citizens. The absence of responsibility mechanism makes the non-official development assistance volatile, resulting in funds mismanagement. For instance, the donors may provide funds for the construction of schools and health sectors in rural areas but the government official's end up misusing them. In some situations, the needy children may be denied financial assistance from the authorities and the opportunities granted to kids from wealthy families like education sponsorship. It implies that corruption hinders transparency and accountability of non-official development assistance in Liberia due to the masquerading of funds by people in power. Therefore, government corruption results in unemployment, and inflation, as well as delinquency behaviors like prostitution, theft and alcohol and drug consumption among youth due to stress associated with poverty.

Accordingly, political instability affects the non-official development assistance in Liberia. The civil war, which killed a quarter-million individuals, affected peace and stability in the country. The conflict created tension among the donors to navigate into the nation and develop. However, since Liberia remains to be the poorest country across the world, total aid increased from 358 US dollars in 2013 to 430 in the year 2017 (Fialho & Van Bergeijk, 2017). It is also evident that the Liberian nation will remain dependent if the action is not taken to eliminate the causes of conflicts. Also, the government failed to enhance social cohesion in the country has created an adverse impact on non-official development assistance due to fear and tension. Poor governance imposes socio-economic challenges to the nation because donors are encouraged by self-interest, not altruistic nature. Unstable political environment minimizes the investment because the scenario scares the development assistance people from venturing into the areas. However, political stability can only be attained by replacing the political leaders in the election.

Besides, the government imposes restrictions among the media not to expose the people struggling with poverty to attract non-official development aid. Various studies suggested that many people, especially in rural areas, are living in the condition of vulnerability (Narang, 2015). They lack necessities like food, shelter, and clothing, as well as education due to financial constraints. The Liberian government restricts the coverage of those stories in fear of tarnishing reputation to other nations. Hence, some donors are not informed about the problem citizens are experienced in some places within the country to offer financial assistance.

How Does This Affect the Liberian Development Agenda?

Non-official development assistance is very crucial in a country as it may bring growth and reasonable outcome. It reduces poverty by increasing cash flow within the economy, increase import, boost the national currency, and lower inflation. However, the rise of governance issues on non-development assistance deters the progression of project in Liberian country. For instance, corruption among the state authorities makes the donors not to eliminate poverty. Foreign aid is disrupted when the government lacks monitoring mechanisms to make strategic programs and policies to ensure equality in resource distribution (Bandyopadhyay, Lahiri, & Younas, 2015). Corrupt governance may misuse the fund donated to run some essential project, creating a state of vulnerability. For instance, the donors may give funds to financially needy students in education but are misused by the people with power. Education acts as a threat to poverty and by sponsoring vulnerable children to acquire knowledge imposes the nation in good progress.

Also, the rise in governance issues towards non-official development aid lowers economic growth. According to the statistics, the rate of poor people is increasing every year, imposing challenges to the economy (Fialho & Van Bergeijk, 2017). Donations empower vulnerable or rural individuals to involve in entrepreneurial activities to raise their living standards. For example, one can get financial support to venture in small businesses which can cater to their necessities. Offering street children or orphans with a donation like clothing and food reduces the cases of delinquency behavior like prostitution, alcohol and drug consumption and theft, which are a threat to economic growth. However, the increase of government issues like political change, corruption, and restrictions hinders donors from offering support to the Liberian nation lowering the economy. Lack of financial aid leads to a rise in inflation because the government is relying only on taxes to spearhead the development project. For example, schools, hospitals, and offering food relief to the poor a situation could be settled by non-official development assistance.

Policy Option That Could Overcome the Government Defect

The policy which can reduce government issues is reiterating the importance of decentralization. The Liberian constitution initiated the decentralization reforms in the year 2012 to ensure the powers and resources are shared equally across the nation (Narang, 2015). The legislature and executive government branches were mandated to sustain the status quo of the Liberian country. The role of decentralization, in the Liberian constitution, was to ensure boundary peace, access to public services efficiently and offer civic education to all citizens. Surprisingly, the governance reforms of decentralization have not been effective in some marginalized places in Liberia. Many rural individuals are still striving with medical facilities, education, poor infrastructure, and lack of public services (Fialho & Van Bergeijk, 2017). The reason behind this is lack of accountability and transparency among the state, and county government to ensure the regional balance. For example, some funds set by the national government are misused by local authorities instead of beginning the project in rural places. Also, the non-official development assistance is not aware of the state the marginalized people are facing, or the donations set to them are not used appropriately. Hence, the emphasis on the need to embrace decentralization and the importance of replacing the corrupt officials will help the economic growth of Liberia.

Conclusion

Government plays a significant role in influencing the international financial flow to achieve the economic growth of the country. The government controls the economic activities, attempting to maintain employment, steady growth, and stability through controlling credit and managing the money supply, tax rate, and spending. However, the corrupt government may affect the economic growth of the nation due to increase in oligopolies and monopolies. For instance, business owners can corrupt government officials to manipulate market mechanism and policies to ensure they dominate the market. In this case of non-official development assistance, the Liberian government lack accountability and transparency to ensure the financial aid reach the poor. The people in power misuse some funds or provided to wealthy persons like education sponsorship. Hence, there is need to adopt a policy which will solve the governance issues.

References

Bandyopadhyay, S., Lahiri, S., & Younas, J. (2015). Financing Growth through Foreign Aid and Private Foreign Loans: Nonlinearities and Complementarities. Journal of International Money and Finance, 56, 75-96. https://doi.org/10.1016/j.jimonfin.2015.04.005

Fialho, D., & Van Bergeijk, P. A. (2017). The Proliferation of Developing Country Classifications. The Journal of Development Studies, 53(1), 99-115. https://doi.org/10.1080/00220388.2016.1178383

Hilton, M. (2018). Charity and the End of Empire: British Non-Governmental Organizations, Africa, and International Development in the 1960s. The American Historical Review, 123(2), 493-517.

Langlotz, S., & Potrafke, N. (2019). Does Development Aid Increase Military Expenditure?. Journal of Comparative Economics. https://doi.org/10.1016/j.jce.2019.05.002

Narang, N. (2015). Assisting Uncertainty: How Humanitarian Aid Can Inadvertently Prolong Civil War. International Studies Quarterly, 59(1), 184-195. https://doi.org/10.1016/j.jce.2019.05.002