From Dependency to Autonomy: Decolonizing the Flow of Donor Funds

By: FI

Introduction

Years ago, I worked on a project for an international organization that received substantial funding. I was struck by how little of that funding actually reached the target group. It seemed that the primary focus was on reallocating funds internally to address organizational cuts, only later modifying the program for the intended beneficiaries.

This blog examines the allocation of funds in development programs, highlighting the gap between what international organizations absorb and what reaches target countries or communities.

Fund Breakdown Example

Let us imagine a development project with a total budget of 10 million EURO, funded by international donors. Here is a breakdown that reflects typical spending patterns:

• Administrative and Operational Costs (45% – 4.5 million EURO): This covers salaries for international staff, office operations (rent, technology, supplies), travel, and program management overhead.
• Monitoring, Evaluation, and Reporting (20% – 2 million EURO): This portion funds data collection, outcome reporting, donor accountability audits, and capacity-building workshops for international staff.
• Local Implementation and Capacity Building (10% – 1 million EURO): Supports the training of local staff, workshops, and materials to strengthen community involvement and expertise.
• Local Program Implementation (15% – 1.5 million EURO): Direct project costs like infrastructure, local staff salaries, services, and procurement of local resources are funded here.
• Community Outreach and Awareness (5% – 500 thousand EURO): Public awareness campaigns, educational initiatives, and media outreach aimed at engaging local communities are covered by this allocation.
• Direct Financial Assistance (5% – 500 thousand EURO): Provides grants or financial aid to beneficiaries such as businesses, schools, and healthcare centers.

This budget breakdown reflects common spending patterns in international development projects funded by donors like USAID, UNDP, or the World Bank.

Accountability and Efficiency

A significant concern with this type of budget allocation is how much of the funding is absorbed by international organizations rather than benefiting local communities directly. Nearly 80% of development aid is consumed by administrative and operational costs, leaving approximately 20% for direct local implementation and aid. This has been widely criticized for its inefficiency. Scholars such as William Easterly argue that a substantial portion of the funds intended for development are redirected to sustain bureaucracies rather than reaching the intended beneficiaries (Easterly, 2007).

For example, the Organisation for Economic Co-operation and Development (OECD) Development Co-operation Report (2021) revealed that in some humanitarian contexts, up to 70% of funds are spent on administrative costs, limiting direct aid to the affected populations. This critique is echoed in Melber et al.’s (2024) work, which emphasizes the need for more equitable resource distribution that aligns with local needs and contexts.

While donors defend administrative costs as essential for accountability and oversight, critics assert that these expenses often divert crucial resources from local communities. The Global Humanitarian Assistance Report (2022) shows that significant funding is allocated for monitoring and evaluation, rather than frontline aid, which undermines the overall impact of development projects. The concept of the “network society,” as articulated by Manuel Castells, explains how international organizations leverage global finance and information networks to justify their high overhead costs (Castells, (1996).

The Power Dynamics of Aid

This imbalance in funding distribution reflects deeper global power dynamics. International organizations often function as gatekeepers, controlling resources while reinforcing dependency and unequal power relations between donors and recipients. This critique is supported by Roth et al. (2024), who note that local organizations are frequently sidelined in favor of international entities, which affects the relevance of projects and hinders local capacity development.

The way international organizations frame development narratives often elevates their role as “experts,” while minimizing the voices of local communities. Communication theories, such as Stuart Hall’s Encoding/Decoding model, help us understand how these organizations shape the development discourse, portraying themselves as indispensable while limiting local participation (Hall, 1980).

Local vs. International Expertise

A key issue in the aid debate is the balance between international expertise and local knowledge. Should more funding be directed to local organizations to empower them, reducing dependency on expensive international intermediaries? Critics like Easterly argue that the heavy reliance on international consultants can overlook the potential for local communities to lead their own development (Easterly, 2007).

A case study from the Handbook on Humanitarianism and Inequality illustrates how a local NGO successfully implemented a community health program, achieving superior health outcomes with only 30% of the usual administrative budget (Roth et al., 2024). This shows the potential benefits of empowering local actors and decreasing reliance on costly international consultants. Participatory approaches, which emphasize the active engagement of local communities, are seen as more effective.

Case Studies and Reports

Although the breakdown of development funds can vary by project, donor, and implementing organization, many reports and studies highlight how much aid is absorbed by international organizations. For example, the Global Humanitarian Assistance Report (2022) regularly analyzes aid spending, pointing out how large portions are dedicated to operational costs rather than direct assistance.

Conclusion

The current structure of development aid raises crucial questions about efficiency, accountability, and the empowerment of local communities. Moving forward, it’s essential to rethink how resources are allocated to maximize aid impact and minimize dependency on international intermediaries. Prioritizing local expertise and adopting more equitable approaches, could lead to more effective,  just and sustainable development outcomes.

In this blog, I have aimed to illuminate important discussions within development studies, particularly focusing on the decolonization of the development movement. By critically examining power dynamics and the colonial legacies that persist in global aid, I stress the importance of prioritizing local knowledge, expertise, and agency rather than relying on top-down, externally driven interventions.

I advocate for a transformation in how resources are allocated, challenging the predominance of international organizations that often perpetuate neocolonial power dynamics through their control over funding and decision-making processes. My goal is to decolonize development by empowering local communities to take an active role in shaping their futures, redistributing resources more equitably, and dismantling narratives that marginalize local voices in favor of international actors.

 Bibliograghy

1.     Castells, M. (1996). The Rise of the Network Society. Oxford: Blackwell.
2.     Development Initiatives. (2022). Global Humanitarian Assistance Report 2022.
3. Easterly, W. (2007) The white man’s burden: Why the west’s efforts to aid the rest have done so much ill and so little good. Oxford: Oxford University Press.
4.     Hall, S. (1980). Encoding/Decoding in Culture, Media, Language: Working Papers in Cultural Studies. London , Hutchinson.
5.   Melber, H; Kothari, U; Camfield, L; & Kees B.(eds.) (2024). Challenging Global Development: Towards Decoloniality and Justice. Zed Books.
6.     OECD. (2021). Development Co-operation Report 2021.
7.     Roth, S; Purkayastha, B; Denskus, T. (eds.) (2024). Handbook on Humanitarianism and Inequality. Routledge.