Rethinking Hyden’s Development Fund Model: A Critique and Suggestions for Modification

Abstract

Goran Hyden’s proposal (1993; 1995; and reprinted in this issue) for national politically autonomous development funds opens up a much needed debate about the causes of alleged aid decline to Africa and what can be done to increase aid and to make it more effective. At its core, Hyden’s National Development Fund (NDF) Model is a proposal to aggregate resources from donors into four or five national pools (based on sectoral foci, e.g., food security, public health, education, etc.), and to distribute this pool to public, private, and voluntary institutions which compete for it on a level playing field within certain specified guidelines. The goal is two-pronged: (1) to make foreign aid more productive in the current context of sub-Saharan Africa and, through it, (2) to stem aid decline, in fact substantially increase aid inflow, to the continent. Few who are truly devoted to rapid development of the continent will object to these goals. There also is no doubt that the proposed mechanism for achieving these goals is innovative and does have a great deal of merit.. It is doubtful, however, that the mechanism, in its present form, can achieve its “dual mandate”. This article points out certain major weaknesses and suggests how they can be corrected if the NDFs, like countless past innovative policy measures or “advice” for Africa, is not to lead to disappointment or even disaster.