Paper details

Paper authors	Fiona Terry
In panel on	Bringing Political Economy back to Centre-Stage
Paper presenter(s) will be presenting	In-Person / Online

Abstract

This paper sets out ethical, legal and security reasons to bring a political-economy analysis back to centre stage in aid operations. In the 1990s and 2000s, critical analyses of the contribution of aid to war economies through aid diversion prompted a tightening of donor requirements to ensure aid reaches those for whom it is intended. This paper looks at some of these requirements and how they sit with the practicalities of operating in a context like Somalia. But the contribution of aid to war economies is not just about curbing aid diversion to avoid goods falling into the hands of parties to the conflict, it is also about analysing who is benefitting from the aid program itself. The obvious candidates are food transporters and cash transfer companies, but the analysis needs to extend to the whole range of indirect costs – office, car and warehouse rental, security, employees - associated with the aid operation. These indirect costs can be almost as high as direct costs and constitute an important injection of resources into local economies. Do aid agencies analyse these sufficiently to know who benefits from this largesse and the implications on how they are perceived locally?

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