Nongovernmental organizations (NGOS) and third world development: An alternative approach to development

Journal of Third World Studies, Spring 2002 by Makoba, J Wagona

The phenomenal growth of nongovernmental organizations (NGOs) at both international and national levels is due to the changing attitude of donor agencies about development assistance and the increased demand for NGO services in Third World countries.1 NGOs are non-membership support organizations involved in relief, rehabilitation, or community development work in developed and, especially, developing or Third World countries.2 Considered part of the civil arena in society which also includes trade unions, people's associations and membership organizations, cooperatives and religious-based charities, NGOs provide a third approach to development between market-led and state-led strategies.3 In the post-Cold War era, governments in Third World countries are experiencing a steady decline in both fiscal support and public credibility.4 On the other hand, markets globally are on the ascent in terms of ideological and resource support, while those in the Third World are still nascent or in decline.

As I argue later, the prevalence of weak states and declining markets in the Third World inevitably leave development-oriented NGOs as the only alternative to promote grassroots development. Hence development-oriented NGOs are not simply located somewhere between the state and market in terms of institutional space, but are emerging as a critical "third or middle sector" fostering the development of marginalized segments of the population. As one observer recently pointed out, developmental NGOs are "needed to cater for those groups whose place at the state or market table is not reserved."5

All NGOs share several characteristics including dependency on donor funding; the need for self-financing, transparency or accountability to donors and clients; and targeting the needy or marginalized segments of the population or operating in various sectors of society depending on the needs to be met as well as resources available in the local community.6

This paper is organized in three sections. The first section discusses the major reasons behind the changing attitude of the international donor community towards development assistance and its impact on NGO growth or expansion. The second critically examines how the failure of both governments and markets in Third World countries to deliver economic development has led to an increasing reliance on the NGOs to fill the "void" created. The final section analyzes the emerging significance of NGOs as an alternative approach to grassroots development in the Third World.

THE CHANGING ATTITUDE OF THE INTERNATIONAL DONOR COMMUNITY AND NGO GROWTH

The phenomenal growth of NGOs on the world scene has been aptly described as "a global associational revolution."7 The number of development-- oriented NGOs registered in countries of the industrialized North "grew from 1,600 in 1980 to 2,970 in 1993".8 It is also reported that "over the same period, the total spending of these NGOs rose from US$2.8 billion to US$5.7 billion in current prices . . . "9 By 1993 there were an estimated 28,900 international NGOs worldwide, with approximately 20,000 of these in Third World countries.10 The growth of the NGOs on the global scene is associated with the changing attitude of the international donor community about development assistance. Such a change of attitude has been influenced by the end of the Cold War, the dwindling development aid from leading industrialized countries, and a new emphasis on targeting aid to benefit marginalized segments of society.

With the end of the Cold War, "development policy and aid transfers have come to be dominated by . . . a new policy agenda.11 Such a policy agenda "is driven by . . . liberal economics and liberal democratic theory."12 Also, recent developments in economic and political thinking about roles of markets and states in promoting economic development have been heavily influenced by neoliberal economic and democratic theory. As a result of such thinking, markets and private sector initiatives are considered the most efficient mechanisms for achieving economic growth and providing most services, including social services (via privatization) to most people. In contrast, governments whose role within the economy is being reduced, are expected to create an "enabling environment" or a legal and policy framework for the private sector provision of goods and services. Under the New Policy Agenda, NGOs are seen as vehicles for democratization as well as for providing goods and services in Third World countries where markets are inaccessible to the poor or where governments lack capacity or resources to reach them. In the eyes of the international donor community, NGOs are both cost-effective in reaching the poor and are considered "the preferred channel for service provision, in deliberate substitution for the state."13 For most Western industrialized countries including the United States, the end of the Cold War has meant an end to using foreign aid to "buy" allies in the Third World to support it against the former Soviet Union. As a result, the strategic and military importance of development aid has diminished.