David C. Engerman. 2018. The Price of Aid

Date01 December 2019
Published date01 December 2019
Subject MatterBook Reviews
332 Book Review 6(3)
David C. Engerman. 2018. The Price of Aid: The Economic Cold
War in India. Cambridge, Massachusetts; London, England: Harvard
University Press. 501 pp. ISBN: 978-0-674-98672-5
DOI: 10.1177/2347797019889284
During the Cold War, non-aligned developing countries were often described as
‘clever calves that could suckle two cows’ as they tried to ‘stoke competition’
between the superpowers to secure aid on better terms from both (pp. 1−2). Given
their heavy administrative overheads, Western aid agencies were in turn seen by
developing countries as ‘cows that drank their own milk’. David Engerman’s The
Price of Aid: The Economic Cold War in India explores the triangular conflict
between clever calves (India) and selfish cows (the United States and the USSR)
between 1947 and 1974. India’s attempts to diversify the sources of aid and reduce
the risk of subversion of its international autonomy entailed by dependence on
one donor were crucial determinants of the dynamics of these conflicts.
Engerman argues that India’s experience deserves a closer scrutiny as it influ-
enced the ‘practices, and later the theories’ of international economic assistance
across the developing world (p. 4). Furthermore, several international develop-
mental institutions ‘emerged directly out of superpower encounters with India’
(p. 11). In the first two chapters, Engerman explains how the superpowers took a
decade to discover independent India and understand the idea of development
before they could ‘invent’ development aid as a tool of foreign policy. The next
three chapters examine development politics, the financialisation of US aid and
the militarisation of Soviet aid. These chapters explain how the late starter United
States edged past the USSR by deploying ‘free money’, aid not tied to specific
projects. The USSR in turn emerged as the dominant source of military aid to
India and later to other developing countries. Free money strengthened the pro-
US lobby only in the short run as, anti-communist commitments notwithstanding,
‘American aid paradigm operated at a high ratio of rhetoric to resources’ (p. 73).
Stringent conditionalities and the US insensitivity to India’s sensibilities further
undermined the lobby. In the following three chapters, Engerman examines the
unexpectedly high non-financial costs—political, strategic and institutional—of
development politics (p. 2).
While this wonderfully detailed book covers several facets of India’s
development history, we will restrict ourselves to discussing Engerman’s
contribution to the understanding of the impact that superpower rivalry had on
India’s policy autonomy. The book can, however, also be read to understand the
origins of public sector steel and oil companies and their technological choices,
India’s clumsy defence purchases, India’s belated turn to international trade, and
the political economy of the community development programmes and the Food
for Peace Programme.
At least since the National Planning Committee debated the future of India’s
economy in the run-up to independence, most Indian leaders agreed that a planned
and industrialised economy was key to substantive independence. However, free

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