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The role and responsibility of foreign aid in recipient political settlements

Working paper 56

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Pablo Yanguas
Abstract
Political settlements analysis has highlighted the role of powerful political and economic actors in shaping institutional outcomes across countries. Its focus on national elites, however, risks biasing this type of theorising towards local factors, when in fact many policy domains in developing countries have become transnationalised: much like private finance or transnational activism, foreign aid can play a significant role in shaping political settlements, for instance those underlying public finance management or basic service delivery. This paper has four aims. First, it revises the basic concept of political settlement with a combination of field theory and contentious politics that emphasises contestation between incumbents and challengers and the mechanisms through which they are affected by transnational forces. Second, based on this conceptual framework, it outlines six ideal types of aid influence over a developing-country political settlement, illustrating donor tendencies to support continuity or change. Third, it investigates the ethical implications of donor influence over political settlements, identifying the types of intervention favoured by consequentialist and non-consequentialist calculations. Finally, the paper presents the kernel for a practical ethic of assistance, which asks whether current debates in the aid community have fully come to terms with the responsibility that derives from agency in the contentious politics of inclusive development.