Transition of Aid Regime Since the 1980s and the Post-MDGs

Abstract

This article attempts to examine the transition of the international assistance regime since the 1980s. The structural adjustment regime formed mainly by the World Bank and the IMF in the 1980s, declined as the Cold War came to an end, and an international assistance crisis followed. The retreat of the structural adjustment regime has instead brought to the rise of the poverty reduction regime in the 1990s.

The poverty reduction regime was formed mainly by the Like-Minded Group (LMG) of the OECD-DAC member countries. Among the other donors, the UK took the lead by proposing sector-wide approaches (SWAPs) and direct budget support (DBS). Since the establishment of the Millennium Development Goals (MDGs), it has become a moral principle that has maintained the poverty reduction regime. MDGs succeeded in raising awareness of poverty reduction, and achieved some practical results in international assistance. There are some criticisms to the MDGs, however.

As the expiry date for the MDGs is approaching, the post-MDG debate is gaining momentum. Non-DAC donors (NDDs), such as China, are growing influences in international assistance, increasingly posing a threat to the DAC-ways of providing assistances that formed the core of the poverty reduction regime. The retreat of the poverty reduction regime yet again may enhance the rise of a new aid regime. However, it will be extremely difficult to persuade NDDs to follow the steps prepared and taken by the traditional donors, and to replace them. The next regime would probably widen the scope of aid process compared to the MDGs framework. Should such regime be established the focus must be placed on the people who are in need.