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National attributes associated with multilateral and US bilateral aid to Latin America: 1960–1971

Published online by Cambridge University Press:  22 May 2009

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Proponents of multilateral aid have generally assumed that such aid is less responsive than bilateral aid to the political characteristics of recipient countries. Many critics of foreign aid have challenged this assumption, arguing that US influence ensures that multilateral programs serve the same interventionist purposes as bilateral. This study of per capita aid allocations to Latin American countries confirms that there are strong similarities in the distribution of aid. However, when the relationships between aid data and data on national attributes are examined, the results do not support the notion that political characteristics account for the similarities. For some multilateral agencies, there is little or no association between aid and recipient political attributes. For others, there are associations with political features, but the associations are not identical with those of US bilateral aid. In short, whatever the determinants behind decisions on the allocation of bilateral and multilateral aid, the same considerations with regard to the politics of potential recipients do not appear to be operating. All of this does not mean that US interests are not being served by multilateral programs. They may be served in a variety of ways, and still be consistent with the results reported here. That important issue is beyond the scope of this very limited study.

Copyright © The IO Foundation 1978

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1 Kindleberger, C. P., Power and Money (New York and London: Basic Books, Inc., 1970), p. 141CrossRefGoogle Scholar, expresses this common view when he writes that “the political element in aid can be reduced… by giving aid multilaterally, rather than bilaterally.” The same point is made byKeenleyside, H. L., International Aid: A Summary with Special Reference to Programmes of the United Nations (New York: H. Heineman, 1966), p. 307Google Scholar. Although written some time ago, Asher's, R. E.Multilateral Versus Bilateral Aid: An Old Controversy Revisited,” International Organization Vol. 16 (Autumn 1962): 697719CrossRefGoogle Scholar, is still a useful summary of arguments concerning bilateral and multilateral aid, and includes the contention that multilateral aid is less related to political considerations. Even if not explicitly stated, this also appears to be one of the assumptions behind reports recommending heavier use of multilateral channels. See, for example, Pearson, L. B., Chairman, , Commission on International Development, Partners in Development: Report of the Commission on International Development (New York: Praeger, 1969)Google Scholar.

2 See, for example, the account in Stoessinger, J. G., The United Nations and the Superpowers: China, Russia, and America, 3rd ed. (New York: Random House, 1973), pp. 129–40Google Scholar, of the intensive but unsuccessful effort of the United States to block a UN Special Fund project in Cuba during the early 1960s.

3 Various efforts by the United States to undermine the Allende government, including actions in the IDB and IBRD, are discussed in Famsworth, E., “Chile: What Was the U.S. Role? More Than Admitted,” Foreign Policy Vol. 16 (Fall 1974): 127–41CrossRefGoogle Scholar; and Peters, J. F. and Laporte, R., “Can We Do Business with Radical Nationalists? Chile: No,” Foreign Policy Vol. 7 (Summer 1972): 132–58Google Scholar.

4 For the period 1960–71 covered in this study, useful discussions of the institutional arrangements, the operations, the types of assistance, and the criteria used in assessing requests for assistance are contained in United Nations, Assistance for Economic and Social Development Available from the United Nations System, A Handbook of Criteria and Procedures (New York: United Nations, 1969)Google Scholar; Baker, J. C., The International Finance Corporation, Origin, Operations and Evaluation (New York: Praeger, 1968)Google Scholar; Dell, S., The Inter-American Development Bank, A Study in Development Financing (New York: Praeger, 1972)Google Scholar; Syz, J., International Development Banks (Dobbs Ferry, New York: Oceana, 1974)Google Scholar; and Weaver, J. H., The International Development Association (New York: Praeger, 1965)Google Scholar.

5 See, for example, Hayter, T., Aid as Imperialism (Baltimore: Pelican Books, 1971)Google Scholar; and Magdoff, H., The Age of Imperialism (New York: Monthly Review Press, 1969)Google Scholar.

6 See Dell, pp. 41–46. Speaking about the IDB, he notes that: “Inevitably, as the chief source of funds, the United States is likely to be in a position to make its views prevail whenever it feels strongly enough on a question to use all the influence at its command. In such cases, the voting procedures of the Bank are a safeguard for the United States, rather than the primary means whereby it secures acceptance of its point of view.”

7 Stoessinger, pp. 133–35, points out that United States opposition to a UN Special Fund project in Cuba in the early 1960s was expressed in economic rather than political terms, although the political motivations were obvious.

8 Loehr, W., Price, D., and Raichur, S., A Comparison of U.S. and Multilateral Aid Recipients in Latin America, 1957–1971 (Sage Professional Papers in International Studies, Vol. 4, Series No. 02–040; Beverly Hills and London: Sage Publications, 1976), p. 13Google Scholar, note that Robert McNamara, President of the World Bank Group, is convinced that economic growth is tied to political stability.

9 Syz, p. 167, observes that the IBRD Executive Directors, Presidents, and other officers have indicated at various times they favor legislation favorable to private investors, measures to control inflation, avoidance of government owned industry, avoidance of excessive rates of population growth, avoidance of nationalization of foreign property without adequate compensation, and avoidance of defaults on international debts.

10 “The United States and International Aid-Giving Organizations: Testing a Critique” (Paper presented to the Twenty-Eighth Annual Meeting of the Western Political Science Association, Denver, Colorado, April 1974).

11 Aid figures came from the US Agency for International Development, Statistics and Reports Division, U.S. Overseas Loans and Grants and Assistance from International Organizations, Obligations and Loan Authorizations, July 1, 1945–June 30, 1972 (Washington, D.C.: GPO, 1973)Google Scholar. Population figures came from various issues, 1960 through 1971, of the United Nations, Statistical Yearbook (New York: United Nations)Google Scholar.

12 The same reasoning explains the decision to omit the recently independent, former British colonies of the Caribbean area. It should be noted, however, that this particular concern in the selection of cases may not have been necessary. Witthopf, E. R., Western Bilateral Aid Allocations: A Comparative Study of Recipient State Attributes and Aid Received (Sage Professional Papers in International Studies, Vol. 1, Series No. 02–005; Beverly Hills and London: Sage Publications, 1972)Google Scholar, found no evidence of a division of labor in his study. In any case, the great bulk of Western bilateral aid in Latin America came from the United States.

12 All international trade data were based on figures from the 1965 through 1973 issues of the United Nations, Yearbook of International Trade Statistics (New York: United Nations)Google Scholar. Data concerning GNP and GDP came from the UN Statistical Yearbook, 1960 through 1971; and from the Organization for Economic Cooperation and Development, Development Centre, National Accounts of Less Developed Countries, 1959–1968 (Paris: OECD, 1970)Google Scholar; and Latest Information on National Accounts of Less Developed Countries (Paris: OECD, 1970)Google Scholar. Figures on energy, protein and calorie consumption, and on life expectancy also came from the UN Statistical Yearbook, 1960 through 1971. Because yearly data were not always available on protein and calorie consumption and on life expectancy, some mid-period data had to be used in these cases. Otherwise, all figures were annual means for the 1960–1971 period.

14 Except for private investment, these figures are all means for the 1960–71 period. Estimates of US investments were not available for all countries throughout the period. Hence, those used were for 1963 only, as provided by various issues, 1963 through 1971, of the United States Department of Commerce, Survey of Current Business (Washington, D.C.: GPO)Google ScholarPubMed.

15 The Analysis of Bloc Voting in the General Assembly: A Critique and A Proposal,” American Political Science Review Vol. 57 (12 1963): 902–17CrossRefGoogle Scholar.

16 World Handbook of Political and Social Indicators (New Haven: Yale University Press, 1972)Google Scholar.

17 Appeal to Force (New York: Thomas Y. Crowell, 1973)Google Scholar.

18 Concentration of Political Power and Levels of Economic Development in Latin American Countries,” Journal of Developing Areas Vol. 7 (04 1973): 397410Google Scholar.

19 Toward Explaining Military Intervention in Latin American Politics,” World Politics Vol. 20 (10 1967): 83110CrossRefGoogle Scholar.

20 The SPSS factoring program was used with type PA 1 and varimax rotation.

21 In a study using different variables and discriminant analysis, Loehr, Price, and Raichur reach the rather anomalous conclusion that, at least for the 1967–1971 period, IBRD aid was far more responsive to political features than US bilateral economic aid. During that period, they argue, US aid was largely responsive to specifically economic considerations.

22 Of course, as Loehr, Price, and Raichur note, pp. 12–13, economic performance and political stability may be related. To the extent this is the case, or is even believed to be the case by those making aid allocation decisions, economic and political considerations may not be separable here.

23 By examining total rather than per capita aid, Loehr, Price, and Raichur found a strong but misleading positive association between aid and population size. See pp. 35–36. Wittkopf found a decline in per capita receipts of bilateral aid with increased size.

24 See United Nations, Assistance for Economic and Social Development Available from the United Nations System, A Handbook of Criteria and Procedures (New York: United Nations, 1969), p. 9Google Scholar.

25 Wittkopf found need in the form of balance of payments support to be an important explanatory variable for US bilateral aid.