Bilateral vs Multilateral Aid

Multilateral aid tends to be less tied to the political self-interest of individual donor countries. One criticism of bilateral aid arrangements is that they are often drawn up based on self interest. Major powers who provide international aid have tended to direct their aid to former colonies or countries with which they have significant strategic ties, economic interests or potential markets. Often, aid money must be spent on goods or services from the donor country. While the United States does not have as developed a colonial history as some other major donor states, it does have a history of providing aid to countries it sees as strategic partners. This was particularly true during the Cold War, but has now emerged as a practice in the war on terror. Aid that is given multilaterally is therefore much more likely to go to developing countries on the basis of need, and of where it has the most potential for good.

Multilateral aid, particularly when delivered through NGOs or the UN, allows for the efficient pooling of financial resources. Much as when an individual makes a donation to a major charity, their small contribution goes much further when combined with those of many others. Particularly in the face of pressure to reduce foreign aid, America can still make a significant impact on development in other parts of the world through combining resources with other donors. By contrast, bilateral aid arrangements are often short-term and subject to change at short notice as a result of political or economic shifts in the donor country. Multilateral aid programmes are therefore more stable and can plan more usefully for the long-term.

Multilateral aid arrangements tend to avoid unnecessarily coercive conditions. One of the strongest criticisms of bilateral aid is the tendency for donor countries to place strict political, diplomatic or economic conditions on the receipt of that aid. For example, the United States greeted Pakistan’s cooperation with the war on terror with a generous economic and military aid package, despite years of sanctions previously. Countries receiving development loans have often faced requirements for changes in internal policies on a range of issues not always directly tied to the aid itself.

Multilateral aid arrangements develop a sense of cooperation among nations with the additional advantage of reducing conflict. Efforts to solve problems, such as poverty, disease and conflict through multilateral efforts suggest that these are “world problems” and not exclusively the problems of a recipient country and an interested donor nation. An increase in multilateral efforts improves the general sense that we are ‘one world” with common difficulties in need of common solutions. Multilateral approaches to solving these problems expand a sense of goodwill.

Multilateral aid arrangements help ensure that different bilateral arrangements do not work at cross-purposes. Years of development experiences have demonstrated that donors sometimes make mistakes in the arrangements they create. Dependency is sometimes fostered, conditions imposed on contributions are sometimes unreasonable and those administering the aid do not always consider the broader picture. If more than one country is approaching the recipient nation with different goals or conditions in mind, their uncoordinated efforts could cause unintended negative effects.

Multilateral aid agencies are more familiar with the regions or nations they work in. Many UN agencies and NGOs have been working in the communities they direct aid to for years. They are more aware of the unique needs of those societies and where the funds can be directed to do the most good.