Edited by Rosanna Calcagno, Policy Analyst in MIPP
Development cooperation, especially in the present pandemic situation, is an increasingly present issue on national agendas. Nations live into a globalized world and the objective inequalities between them involve a series of actions at the international level in support of some of the most disadvantaged states. This paper aims to investigate the relationship between development cooperation projects and periods of economic crisis, with particular reference to the case of Italy in the post 2008 period. The aim is to underline the existence of a tendency among states to reduce development aid in times of economic crisis but at the same time to explain why this trajectory is not convenient. Despite immediate benefits, in the long run reducing development cooperation aid has negative effects both on the international system and on individual states.
As regards the relationship between development cooperation and economic crisis, the main researches carried out on the subject matter confirm the existence of a correlation between the two phenomena. It was found that in times of recession, states tend to decrease the funds allocated to development cooperation projects. This situation generates a paradox: not only the less economically stable countries are the most affected by the crisis, but they are also less supported by the international community than in periods of stability. Here the case of Italy is taken into consideration: to understand if what reported by previous studies was accurate, the country's trend over the years was observed. Data confirmed (as will be seen later) that the economic recession has also led to a change in the modalities of development cooperation per se. The first paragraph introduces the concept of development cooperation. The second one emphasizes the link between the latter and economic crisis. The third explores this phenomenon in the Italian context while the last paragraph aims to propose a valid policy alternative to overcome the problem described so far.
What is it about (in short)?
DEVELOPMENT COOPERATION AND ITS FOUNDATIONS
THE LINK BETWEEN DEVELOPMENT COOPERATION AND CRISIS
DEVELOPMENT COOPERATION IN ITALY: ORIGINS AND EVOLUTIONS
A BETTER PERSPECTIVE
CONCLUSIONS
Development cooperation and its foundations
The concept of development cooperation is based on the awareness that unfair inequalities exist between states in the international system. For these reasons it is considered necessary to develop actions to favor a more equitable distribution of resources among states to promote a system in which all countries can increase their potential. In the name of solidarity, some wealthier countries establish a relationship (in fact this is not a one-way cooperation) with states needing support: the former offer their resources but it is only when the latter indicate their needs that the interventions become effective, lasting and respectful of the local culture. Investing in a "fairer" world means at the same time investing in a "safer" world. When we talk about development, we do not only mean economic development, but also human development to include the growth and strengthening of the human capacities of individuals in the poorest countries. In this perspective, each individual must be placed in the conditions to access resources to lead a healthy and dignified life and to contribute to the development of his country.
Disparities between advanced and emerging countries have increased over time. Since this situation is an obstacle to growth, reducing inequalities therefore means promoting progress.
The link between development cooperation and crisis
As can be easily understood, there is a link between the international economic situation and the levels of development cooperation interventions. In fact, contexts of economic instability exacerbate the differences between northern and southern countries of the world and at the same time reduce the amount of activity linked to development cooperation and international aid. Recent studies actually show that the effects of crises on international aid depend on how serious the crises themselves are and on the priorities set by governments. From previous crises we can learn how reducing existing resources leads to a reduction in development cooperation funds a year or two later. This mechanism testifies that the effects of a recession can be felt even years after the outbreak of the crisis itself.
As mentioned above, in times of crisis it is highly probable that reducing national spending also means reducing funds for international aid. The theory of international relations actually explains this phenomenon through the existing trade-off between cooperation and competition. This trade-off would take place adequately in a situation of economic difficulty. According to the Theory of Games, cooperative actions theoretically guarantee better results for the community in most cases. Following this interpretation, then states would be led to collaborate to be prepared for uncertainty situations. To put it another way: in a dangerous situation, joining forces could minimize disadvantageous situations for everyone.
In this regard, the best witness in history is the post-crisis period of 2008. Although the first signs of crisis had come from mid-2007, the international community did not realize its real gravity and the threat it posed to the economic system until September 2008. Governments soon began to mobilize to save the financial system from collapse but the effects, in terms of the real economy on the growth of all world economies, have been devastating and led to a recession whose effects still last today. The great global crisis originated in the USA but brought the entire planet to its knees, albeit in different ways and intensities. Collapses in production levels, unemployment and the weakening of financial systems are just some of the effects resulting from the 2008 crisis.
In this scenario, if the Theory of Games can be applied to the attitude of individuals in such a difficult moment, the same cannot be said for private subjects, institutions, states and supranational subjects.
To address these issues, states took measures to support the financial system, stimulate demand levels and balance state treasuries to tackle the sovereign debt crisis. At the international level, on the one hand, coordination policies between the various states were developed, on the other there was a blocking of international aid. The causes are to be found in the fact that the donor countries had to adopt austerity measures and these affected the levels of international aid for the most disadvantaged countries.
International aid was also reduced to economically disadvantaged countries, those that most suffered the negative economic effects of the great crisis. In fact, in 2009, the expansion of emerging and developing economies was only 2.1% compared to a growth rate of 6.1% in 2008.
In times of economic crisis (or crisis in general), reducing funds for international cooperation has proved to be an unprofitable action in the long term. Although this awareness emerged at various levels in supranational organizations, in the years following the crisis almost all countries reduced the funds allocated to international aid.
In a globalized world like the one we live in, however, such action is not far-sighted. The SARS-CoV-2 pandemic that broke out in 2019 is a striking example of this: everything about one state automatically affects the other states. If cutting funding for international cooperation is beneficial in the short term, there will be higher costs and fewer economic opportunities in the long run.
For the reasons listed so far, it is necessary to propose structural reforms to be implemented also through the creation of a proactive and favorable atmosphere by international organizations.
Development cooperation in Italy: origins and evolutions
The first mature phase of development cooperation in Italy (1960s / 70s) had a movementist nature of solidarity from below. In those years, Italy witnessed an associative spontaneity that in the following decade assumed a professionalized and bureaucratic nature. In the course of this transformation, the necessary resources were quadrupled. In 1987 the Ministry of Foreign Affairs recognized NGOs as the main actors of international cooperation. Over time, however, the growing bureaucratization of organizations and the increasing level of skills required has increased distance between organizations and the population, destining all those poorly structured and therefore not very competitive activities to failure. In the 1990s, the political and economic crisis caused a reduction in funding to NGOs. Actions of those years were therefore limited to the administrative and procedural constraints imposed by the state. At the same time, due to the increase in international humanitarian crises, the movementist side of previous decades re-emerged and networks and organizations from below were founded. In the 2000s, foreign NGOs entered Italy using private donations and fundraising as a method of financing. The increase in humanitarian emergencies and the advent of the 2008 crisis have made the action of NGOs more complex (see below). The same happened with the SARS-CoV-2 pandemic crisis.
The Italian system of development cooperation was then subsequently outlined by law no. 125 (General discipline for international development cooperation) entered into force on 29 August 2014. The intention of the legislature was to adapt Italian actions to the guidelines of the international community on the issue in question. The pillar of the law consists in the inclusion of the principle according to which development cooperation is "an integral and qualifying part of Italy's foreign policy." For this reason the Ministry of Foreign Affairs changed name to Ministry of Foreign Affairs and International Cooperation (MAECI).
As mentioned above, the area of development cooperation suffered a setback in all EU countries but especially in Italy.
Italy was one of the countries most affected by the 2008 crisis. The government was forced to use austerity policies, also due to the severe budget constraints imposed by the European Union. The many cuts in public spending made in that period also include those relating to public development aid. Specifically, Italian cuts in this sector were even greater than in other European countries. From 2008 to 2012 Italy cut funds by almost half (45.70%) while European countries in general by just 10.24%.
In reality, the national trend was not uniform but varied according to both the recipients and the origin of the funds. Indeed, the funds supplied by the government to non-governmental organizations for projects promoted by civil society suffered multiple cuts. From 732 million euros in 2008 they were reduced to 86 million in 2012. In percentage terms, a reduction of 88.25%. Due to public funding cuts, NGOs supporting international cooperation have suffered an unprecedented crisis that forced them to downsize considerably to the point of having to close. On the other hand, funds for institutional cooperation, government programs, multilateral organizations and public bodies have not had the same fate.
This type of selection did not go unnoticed and aroused several criticisms. The benefit obtained, however, is only an illusion because in reality this government choice acts against the purpose of development cooperation. It is clear that in Italy the commitment to economic development has been poor and emergency interventions have been carried out rather than lasting and sustainable programs. NGOs, on the other hand, thanks to their light and flexible structure (different from the hierarchical and bureaucratized one of the institutions) and to their bottom up approach (with civil society as protagonist) would more easily reach the goal of economic development because they are able to reach people's problems more widely and precisely.
The political line followed by Italy after the 2008 crisis is that of the progressive exclusion of the third sector from international cooperation policies. Going in this direction, the country runs into two main risks. The first concerns the refusal by the civil society from the north and south of the world to cooperate: cooperation between states and companies takes the place of cooperation between populations, undermining the precious dialogue existing between the various parts of the social composition. The second risk is that international solidarity activities could renounce the educational and cultural change role they usually have. A globalized world needs globalized actions that aim to involve as much as possible all the layers of society with the aim of generating effective and lasting changes.
Italy’s position is in contrast with the lines of the European Union. The latter, as the main aid donor, instead hopes that all the commitments made in the pre-crisis period will be carried out because it believes that a European approach for effective aid will lead to huge gains in the following periods. The EU has a duty to help developing countries in fighting the consequences of the economic crisis and urges member countries to strengthen their commitments on public development aid, as well as to increase the volume of donations by adapting to international commitments.
A better perspective
As repeatedly stressed by supranational institutions, overcoming economic crises requires solutions of international cooperation. For these reasons it is essential for states to maintain international aid commitments and increase cooperation policies as well as opportunities for developing countries to use their resources efficiently in order to achieve a situation of well-being. Cooperating in crisis situations is not only desirable but necessary. This is possible by increasing actions not only in terms of quantity but also qualitatively. This means developing stable cooperation policies that produce lasting results over time. In a globalized context, cooperating is the only alternative to address uncertainties in times of crisis. These efforts must be undertaken both between individual states and within supranational organizations. In any case, the response to global crises can only be a global response that appeals to the responsibility of all state actors.
International cooperation and development cooperation, as mentioned at the beginning, are not implemented only through institutions (national or supranational) but on the contrary can take the form of spontaneous associations emerging directly from civil society and acting through the role of non-governmental organizations. Here we affirm the need to increase state funding opportunities for these realities in order to encourage and increase alternative development cooperation activities which, thanks to their flexibility and proximity to the population, are able to better express their mission and to raise public awareness for a greater impact in terms of results. In other words, we want to promote the search for alternative cooperation models based on the concept of decentralized cooperation. This proposal also arises from the awareness that in times of crisis the tendency of governments to reduce aid does not correspond with the behavior of people. Indeed, in times of crisis, private donations (of money and time) seem to have ignored economic difficulties and been more successful than publicly funded actions. Not surprisingly, the number of voluntary associations that promote international solidarity actions has been growing for years. In Italy the non-profit institutions active between 2001 and 2011 increased by 28% and volunteers by 43.5%. For these reasons, it is a contradiction to reduce the funds to these realities which are instead symptomatic of a living and thriving civil society.
The globalized context in which our country and the others are inserted forces us to adopt solutions with an international dimension because the destiny of each state is closely linked to that of the others.
For these reasons, this paper proposes not only to strengthen international cooperation policies but also to adopt alternative models with a bottom-up approach.
Conclusions
The 2008 Financial Crisis had the most severe effects on emerging and developing countries with the lowest income. This crisis has actually accentuated the problems (eg energy and climate crisis) already existing in these countries. Although the crisis did not originate in developing countries, they have suffered the most disastrous consequences at the financial level and, above all, at the economic, social and humanitarian level. Given the highly globalized context in which all states operate, a vigorous and prompt response from the entire international community is required in the face of crisis situations. Over time, these actions must then take on a stable form of collaboration between donors, partner countries, financial institutions and civil society.
In addition to intensifying these actions on a quantitative level, this paper strongly supports the need to increase the quality of operations as well. How to do it? By adopting a decentralized cooperation model, based on an intercultural, intergenerational and interdisciplinary approach, in which, alongside the institutional promoters, there are also international organizations that have more contact with civil society. In difficult times such as during an economic crisis (or for example the most recent SARS-CoV-2 pandemic crisis), development cooperation actions and programs should never be targeted by austerity policies because this would implicitly mean considering them secondary among the priority of the Italian institutional agenda. On the contrary, cooperation in all its forms is essential for a less risky and conflictual coexistence capable of managing major global events.
To achieve this goal, it is essential to carry out a cultural revolution by placing civil society at the center to promote the social and economic progress of developing countries.
Translated by Simona Taravella
Sources and bibliography
- Agenzia Italiana per la Cooperazione allo sviluppo, (n.d.) - “Sistema della cooperazione italiana”.
https://www.aics.gov.it/home-ita/agenzia/sistema/
- Camera dei Deputati, (2021) – “Il sistema italiano di cooperazione allo sviluppo”
https://temi.camera.it/leg18/temi/il_sistema_italiano_di_cooperazione_allo_sviluppo.html
- Università degli Studi di Ferrara; Centro di ateneo cooperazione allo sviluppo internazionale (n.d.) - “ Cos’è la cooperazione allo sviluppo”
- Li Savelin, (2012) - “International Cooperation in Times of Global Crisis: Views from G20 countries Highlights from the conference”
https://www.bruegel.org/wp-content/uploads/imported/events/121018_event_summary.pdf
- Cristiano Colombi, (2013) – “La cooperazione internazionale al tempo della crisi”
- Jose Antonio Alonso,Jose Antonio Ocampo, (2018) – “Development Cooperation in Times of Crisis”
https://donapdf.blogspot.com/2018/08/development-cooperation-in-times-of.html?m=1
- Parlamento Europero, (2010) – “Relazione sulle conseguenze della crisi economica e finanziaria mondiale per i paesi in via di sviluppo e la cooperazione allo sviluppo”
https://www.europarl.europa.eu/doceo/document/A-7-2010-0034_IT.html
- Giorgia Cacciolatti, (2021) – “Cooperazione allo sviluppo, come è cambiata in Italia? Antiche solidarietà e nuovi modelli, il seminario di Firenze”
- Educational International, (2012) – “Crisis not an excuse for cuts in development cooperation spending”
- Paolo Quercia, (2010) – “Dalla cooperazione allo sviluppo. L’Italia e i cambiamenti globali nell’APS”
- Stefano Manservisi, Paolo Lembo, Laura Frigenti, Angelino Alfano, (2020) – “Investire in cooperazione internazionale è necessario per ripartire”