Political Economy and The Outlook for Capitalism Joint International Conference, Paris, France, 5 - 07 July 2012, pp.1-26
This study aims to examine the rationale of Official Development Assistance (ODA) which has been promoted as a development receipt since the end of the Second World War. In doing so, it discusses foreign aid policies of both the established Western donor countries of Development Assistance Committee and the emerging donors from a political economy perspective. It is assumed that the operations of “international aid market” have become more complicated after the remarkable increase in foreign aid from the emerging donor countries. The study puts forward the idea that ODA is a tool that supports the uneven and combined development process among countries rather than creating a big push that would lead developing countries into a path of economic development as it has been assumed in the mainstream economics literature.
Empirical studies that evaluate the efficiency of foreign aid in terms of both established and emerging donors at the macro level present a general framework for the operations of this aid market. However, they often do not provide analyses of mechanisms through which foreign aid flows serve for the interests of donor countries based on detailed case studies. In the second part of this study, therefore, the reasons behind the ODA allocation of Turkey, whose aid flows increased sharply after 2003 will be analysed and the efficiency of these flows for recipient countries will be evaluated. This will be done by using data obtained from the Turkish Cooperation and Development Agency. It appears that Turkish ODA is an efficient political tool for being a regional power as well as an economic one for gaining new markets and sustaining the re-investment of economic surplus. In this respect, this study seeks to show that ODA flows such as the Grand Student Project, Ecobank credits and construction investments undertaken in the name of education and health serve for many purposes for Turkey as a donor country.