The Human Journey

Creating a Sustainable Future

Aid – Is Democracy a Factor?

Photo of Lee Kuan Yew
Under Lee Kuan Yew Singapore became a de facto one-party state. He governed the country for more than three decades from 1959-1990. In Lee’s view, “Democratic procedures have no intrinsic value. What matters is good government.” According to him the government’s primary duty is to create a “stable and orderly society” where “people are well cared for.” He was regarded by his countrymen as a benevolent dictator. Singaporeans loved him for raising their living standards and, more importantly, their prestige.

Occasionally, good policies come from the most unlikely sources, Suharto was undoubtedly a corrupt dictator, but he used education to deliver his message and unify Indonesia. Dani Rodrik at the Institute for Advanced Study describes investing in autocracy “like a very risky bet: you can win big with Lee Kuan Yew, or you could lose it all with Mobutu.” Nevertheless, as we have seen, both multilateral and bilateral aid agencies repeatedly invest in projects where corruption by autocratic governments is persistently rampant and visible.

Photo of Mobutu Sese Seko

Mobutu Sese Seko President of the Democratic Republic of the Congo, ruled for 31 years. Mobutu changed the country's name to Zaire in 1971. Known for his trademark leopard-skin hat, he plundered and looted his way to an estimated $5bn (£3.1bn), with homes in Switzerland and France.

Along the Erie Canal, Burffalo N.Y. postcard
Along the Erie Canal, Buffalo, N.Y.

Democracies favor development because they protect individuals by limiting the power of government, the stability of which encourages individual investors and innovators responsive to local conditions. We’ve seen this in American development. When President Thomas Jefferson declined to support the use of federal funds for a canal in New York and his successor James Madison vetoed a bill that would have provided federal money for canal and road projects, an individual named Dewitt Clinton – who would later become New York’s governor – garnered state support for the construction of the Erie Canal. It was completed in 1825, and gave merchants in New York access to markets in the American interior as well as international markets. Because of it New York became a major international shipping hub, whose flourishing trade created a boom in financial markets and an increase in real estate prices.

So a free society provides incentives for individuals to solve their own problems. Poor health was still a problem in New York in 1850, where one third of all children died before the age of five. Solving this infant mortality crisis came from the efforts of many different groups. First, the causes of death and disease had to be understood, then improvements were made to drinking water and sanitation. Sanitary conditions were difficult to maintain for people living in cramped apartments, so people demanded government action.The Board of Health began enforcing sanitation codes and public-health nurses started teaching mothers the importance of hygiene. The combination of all these efforts led to a dramatic drop in Infant mortality by 1920.

Daniel Ehrenfeld states in The Journal of Humanitarian Assistance: “the presence or absence of political and civil rights in the recipient country has one of the greatest effects on the efficiency with which aid promotes development.” Multilateral and bilateral aid to governments have a much greater chance where there are democracies in place, because once people have a voice and a way to hold elected officials accountable, they force governments to make concessions and become more effective in delivering the services they need.

Sometimes greater transparency, improvements in accountability and reduction in corruption can take place at the local level, even within authoritarian governments. In 2010, Uganda ranked 127th out of 178 countries in terms of corruption according to Transparency International. The government funds schools but at that time only 13 percent of the amount reached them, until word got out that district officials were diverting most of the money. Newspapers across the country informed the public. A few years later, when another survey was taken, schools were receiving 80 percent of the money allocated to them.

The threat of audits reduced theft by community leaders in Indonesia by one-third. Holding local elections can encourage leaders to pay more attention to people’s needs, provided they are free and fair and the elite members of the community don’t dominate the process and discourage others. Again in Indonesia, turnout at Town Hall meetings increased and more villagers spoke out when they received a formal invitation in the mail and knew they were expected to be there to voice their opinions; and they filled out more comment forms when local schools distributed them rather than village leaders.

Generally speaking, voters in developing countries know very little about their candidates and assume they are all equally corrupt, so people vote based on ethnicity rather than merit. When Brazil started to provide voters with useful information by auditing candidates before an election, people were much more likely to vote out corrupt candidates and re-elect honest ones. By converting to electronic voting machines, they enabled many poor illiterate people to vote and they naturally tended to vote for poor less educated candidates who favored policies that helped them.

The number of nations 1800–2003 scoring 8 or higher on Polity IV scale,
another widely used measure of democracy.

Even when international aid organizations do attempt to offer assistance to autocratic governments on a conditional basis, according to Owen Barder of the Center for Global Development, it doesn’t work. A change in the hearts and minds of those in power is unlikely to happen unless leaders see advantages for themselves. Pressure and persuasion can, however, work on a Government to Government basis. In 2006 under government of President Óscar Berger the UN and Guatemala signed the International Commission Against Impunity in Guatemala (in Spanish “Cicig”). It was established to help expose the ties between criminal networks and politicians. When the Northern Triangle countries, El Salvador, Guatemala, and Honduras were seeking $20 billion in U.S. aid, as part of the “Alliance for Prosperity,” the lure of that aid was used by the US to pressure Guatemala’s then President Otto Perez Molina to rid his administration of corrupt officials and to renew the mandate of Cicig.

Otto Pérez Molina

Cicig emboldened the nation’s own prosecutors to hold the elite to account and became a source of inspiration for many Guatemalans. It encouraged Guatemala City’s middle class, long reluctant to speak out, to join forces with peasant and indigenous groups, in protests and street demonstrations. Eventually, the nation’s church and business leaders also took the side of the protesters to demand change. From April 2015 until the beginning of September, thanks in part to Facebook and other social media outlets, demonstrations grew to include tens of thousands of citizens demanding that their President Otto Perez Molina step down over accusations that he played a major role in a multimillion-dollar fraud scheme. As a consequence Molina was stripped of his immunity from prosecution by a unanimous congressional decision, and was finally jailed on September 3, 2015.


Successful entrepreneurs not only bring new products to market, they can create businesses which hire local people; pay taxes which can enable local, state and federal governments to provide basic services; and they create demand for products and services which creates additional businesses and jobs to stimulate the market further.

By connecting to local entrepreneurs, large companies can provide a system that treats the poor fairly and enables them to earn more from their labor. When ITC wanted to establish a reliable source of soybeans from subsistence farmers in India, it put personal computers in villages to give farmers the ability to check prices before taking their products to market. It also provided accurate weighing, immediate payment and eliminated transportation costs with the result that both ITC and the farmers have benefitted. Called e-Choupals, ITC trains a farmer to manage the Internet kiosk and become the official e-Choupal Sanchalak for the area. By 2008 40,000 villages and 4 million farmers had this service, at the time making it the world’s largest rural digital infrastructure created by a private enterprise. The company uses satellites and solar panels to sidestep the state's shaky power supply and lack of phone lines; and is able to offer a full Internet service on these computers to instantly broaden villagers' horizons.


The ITC Choupal Saagar functions as a hub for a cluster of villages

The access to e-Choupals, within walking distance from the farm gate, is supplemented through physical infrastructure – the ITC Choupal Saagar – which functions as a hub for a cluster of villages within tractorable distance. These made-to-design hubs also serve as warehouses, and as rural hypermarkets for a variety of goods. In effect, the
e-Choupal infrastructure is potentially an efficient delivery channel for rural development and an instrument for converting village populations into vibrant economic organisations.

The best problem solvers are those who deliver what is needed at the highest quality and for the lowest price. The knowledge of how to do this is often accessible only to local insiders who can see what is needed, have the flexibility to adapt to changing conditions and, above all, the incentive and will to get the job done. In the violent aftermath of the disputed Kenyan presidential election in 2007, a young Kenyan David Kobia and his friends launched the nonprofit Ushahidi (which is Swahili for “Testimony” or “Witness”). Created over a weekend because they saw the urgent need for people to know which areas were violent, which were safe, or where to find resources like medical help and water, Ushahidi quickly acquired 45,000 users and the founders realized that it had potential. It enables anyone with a phone or Internet access to record, communicate and store events in real time, especially in areas of the world that may have difficulty connecting and sharing stories. It now expands over 10 time zones and has crowdsourcing maps in over 30 languages. It’s been used in a number of natural disasters such as Typhoon Haiyan in the Philippines, Hurricane Sandy that hit the Caribbean, Canada and the United States in 2012 and the Haitian earthquake that also happened in 2012. Among the events that have been reported using Ushahidi are power outages in India, sexual harassment incidents during the Arab Spring, gender-based violence in Pakistan, and hate crimes in South Africa.

Photo of a cell phone
Mobile devices provide access to information.

Entrepreneurs can be flexible, adapt and make changes: Ushahidi also created Crowdmap, a hosted version of their platform with centrally-located data, made for quick mapping with social media or the web when people need to get information out faster. When they saw that a major obstacle to their plans was reliable connectivity in the areas they wanted to reach, they created BRCK a router device specifically designed for remote African locations. As Nathaniel Manning, their director of business operations says: “People from Nairobi are much better suited to design things for their communities and come up with solutions than someone in Silicon Valley who is no doubt brilliantly smart, but they don't live with the problem.” Ushahidi now also provides technology consulting for clients such as Al-Jazeera, the World Bank, and the United Nations.

Entrepreneurs are and will continue to make a significant impact on the continent of Africa. According to April 2015 Forbes magazine 400 applications from 30 countries entered their 2015 competition She Leads Africa Entrepreneur Showcase from which they selected “six early stage entrepreneurs who in just two years of operation have combined revenue of around $3m USD, more than 11,000 customers and represent various consumer goods industries including apparel, beauty, food and health.”

“Entrepreneurship empowers people to no longer be subject to aid agencies, but to be part of something to pursue their dreams. Entrepreneurs like you can change the world one idea at a time,” President Obama said during a White House event in May, 2015. However, less than one in four Africans have access to the training and money they need to start or grow a business by themselves, so this is certainly an area for investigation and support.