Help from Outside Can Damage Local Institutions

From a review of Breakdown in Pakistan by Masooda Bano, part of Scott Siskind's book review contest:

Since Pakistan’s government is of limited use to much of its population, “a vibrant network of [non-state groups] emerged to meet the collective needs of the community and those of the poor.” They weren’t founded in response to availability of external funds, but as a response to disasters or a perceived need among some target population. Bano cites the example of Anjuman-Faizul-Islam, one of Pakistan’s oldest voluntary organizations (VOs), “set up in response to a famine in Bengal that left many children orphaned,” or the All Pakistan Women’s Association, created in 1948 to promote women’s rights, literacy, and economic opportunities.

With the dawn of the NGO era of aid in the 1980s, Western donors and charities began combing Pakistan for local nonprofit partners to implement their projects, and discovered this rich base of small-scale organizations already acting as an informal safety net. The way ahead seemed clear: train Pakistani VOs in grant management and project implementation, so they could tap into larger donor funds and take their good work to scale.

Grants were won; aid projects implemented; success declared. But as Bano relates, Oxfam soon discovered an unexpected dark side to its “capacity-building” work in Sindh province. It had trained six locally prominent welfare organizations in strategic planning and proposal writing, and got them started on implementation by giving them $1000 to work with. The VOs largely met their explicit project targets, and seemed ready to engage with international development funds on a scale much greater than they’d handled before.

Yet all six organisations were visibly more dysfunctional at the end of the project than they had been at the beginning. They were consumed by factionalism, accusations of favoritism, legal battles over control of funds. And they had lost virtually all of their volunteers—notably including the members whose monthly donations and contributions of time had for decades been the backbone of their work. An Oxfam official observed about one group: “From thirty active members, the size of the team shrank to three or four people who had become workshopias,” i.e. those who had gone to every training workshop and built the strongest relationships with the foreign donor. The kind of welfare work the VOs had previously done, based on mobilizing communities for mutual support, was now beyond their capacity.

Western aid to poor countries may have saved many lives, but the unintended costs have been very high.