Reforming Foreign Aid to African Development: The Politically Autonomous Development Fund Model

Abstract

The purpose of this paper is to introduce a novel proposal for how foreign aid can be made more productive in the current context of sub-Saharan Africa. The basic assumption is that foreign aid must be adapted to the specific challenges in these countries: high levels of external dependency; weak public institutions; pressures to democratize; and, low levels of trust. The politically autonomous development fund, that is being proposed here, serves as an intermediary between the donors, on the one hand, and the operative recipients on the other, thereby promoting greater local responsibility and accountability and motivating Africans to take important steps towards improved governance. By helping to aggregate incoming donor finances into sectorial funding mechanisms, these funds reduce the administrative burdens on both donor and recipient sides. This paper is written as a background paper for discussion. It introduces the challenges and the rationale for these funds and continues to outline their basic features. It ends by raising a number of questions that need to be further addressed before the proposal can be put into operation.