The Political Economy of Aid and Governance in Cambodia

The impact of massive aid on development and governance has been studied for a decade with mixed results. Using the results of an elite survey on aid and quality of governance based on Kaufmann et al.' s six dimensions (voice and accountability, political stability, government effectiveness, regulatory quality, rule of law, and control of corruption), this article offers a case-study of Cambodia. The country's challenges in light of high aid dependence and 'Dutch disease' in the aid sector are elaborated, and disappointing human development outcomes are examined. Despite more than five billion dollars in aid, infant and child mortality and inequality have worsened. Key informants are overwhelmingly in agreement that, save for political stability, aid has not had a positive impact on governance in Cambodia. The failure on control of corruption shows how hard it is for donors to be tough on a country with extreme poverty. On the basis of what has been accomplished to date, however, aid seems unlikely to be able to deliver large improvements in governance and in many ways may even contribute to its further deterioration.