Thesis (MA)--University of Stellenbosch, 2003. / ENGLISH ABSTRACT: This study investigates the impact of foreign aid on the relations between Non- Governmental Organisations (NGOs) and the state in South Africa since 1994. There are three different ways in which NGOs can interact with the state and public policy: viz. they can support and help to implement policies, attempt to reform policies, or oppose them. During apartheid, the nature of NGO-state relations was characterised by political confrontation and distrust. NGOs primarily served as organisations of opposition to the state's exclusivist and dehumanising policies. Many NGOs, however, also provided developmental and social services to communities who were neglected by the apartheid state. After the first democratic election in 1994, the role of NGOs underwent a significant process of change. Various factors contributed to this change. This study, however, primarily focuses on the role of foreign aid and its effect on NGO activities in South Africa, post-1994. This study relied on secondary data sources (both qualitative and quantitative) available in the area of NGO state relations. The study also focused on two major donor agencies in South Africa: European Union (EU) and United States Agency for International Development (USAID). Analysis of data reveals that, since 1994 much of the funding that was previously directly channeled to civil society now goes to the state, which distributes it to targetted NGOs. As a result many NOOs have collapsed because of a shortage of financial resources to sustain their work. Secondly, since 1994 the rationale and purpose behind international donor policies has been to advance the New Policy Agenda (NPA), which is aimed at promoting free market-orientated reforms and the consolidation of liberal democracy. As a result, foreign aid donors have endorsed the liberal economic policies, which are set out in the government's macroeconomic strategy, viz. Growth, Employment, and Redistribution (GEAR). Thus, both government and donors have prioritised NGOs who are involved in service delivery rather than those that are likely to challenge and oppose liberal market policies. They have also shown preference to NGOs that are more concerned with the norms and practices of procedural democracy as opposed to those that are concerned with issues of participatory and social democracy. This has resulted in constraining the overtly political and advocacy role, which characterised NGOs during the apartheid era. International donors, via government disbursement institutions such as the National Development Agency (NDA), have also constrained the work of NGOs by insisting on numerous managerial related requirements that have been made conditional for the receiving of financial support. Many small, informal, rural community based organisation that lack the required administrative capacity have, as a result, been facing serious financial crises. Subsequently, NGO-state relations, since 1994, have become less adversarial and confrontational. Most NGOs, complement and support the state's social services delivery programmes and also serve as organisations which help shape the norms and practices of procedural democracy. The study concludes, that the persistent inequality, poverty and unemployment which is associated with the GEAR macroeconomic policy and endorsed by international donor agencies, will lead to the resurgence of advocacy NGOs. Furthermore, in order to resuscitate their role and to ensure their vitality as organisations, which promote participatory democracy, it is essential to focus on strategies, which can effectively challenge the current funding environment to NGOs. These include, building the administrative capacity of both the NDA and NGOs, ensuring NDA independence, and ensuring recognition by funding institutions of the importance of advocacy NGOs in the consolidation of economic democracy. / AFRIKAANSE OPSOMMING: Hierdie studie ondersoek die impak van buitelandse hulp op die verhoudinge tussen Nie-Regeringsorganisasies (NRO'S) en die staat sedert 1994. Daar is drie verskillende wyses waarop NRO's interaksie kan bewerkstellig met die staat en met openbare beleid, naamlik, hulle kan help om beleid te implementeer, hulle kan help om beleid te verander, of hulle kan beleid teenstaan. Tydens apartheid, is die aard van NRO - staat verhoudings gekenmerk deur konfrontasie en wantroue. Die NRO's het primêr gedien as organisasies van opposrsie teen die staat se eksklusiwistiese en onmenslikingsbeleid. Talle NRO's het egter ook ontwikkelings- en sosiale dienste voorsien aan gemeenskappe wat afgeskeep is deur die apartheidstaat. Na die eerste demokratiese verkiesing in 1994, het die rol van NRO's 'n beduidende proses van verandering ondergaan. 'n Verskeidenheid faktore het bygedra tot hierdie verandering. Hierdie studie fokus egter primêr op die rol van buitelandse hulp en die uitwerking daarvan op NRO's se aktiwiteite in Suid-Afrika na 1994. Hierdie studie het staatgemaak op sekondêre bronne (kwalitatief sowel as kwantitatief) in die gebied van NRO's - staat verhoudinge. Die studie fokus ook op twee belangrike donateur agentskappe in Suid-Afrika: die Europese Unie (EU) en die Verenigde State Agentskap vir Internasionale Ontwikkeling (VSAlO). 'n Analise van die data toon aan dat, sedert 1994, heelwat van die befondsing wat voorheen direk gekanaliseer is aan die openbare gemeenskap, nou na die staat gaan, wat dit versprei na geteikende NRO's. Gevolglik het talle NRO's ineengestort vanweë 'n tekort aan finansiële bronne om hulle werk vol te hou. Tweedens, sedert 1994 was dit die rasionaal en doelstelling van internasionale donateurskapsbeleid om die Nuwe Beleid Agenda (NBA) te bevorder, wat as doelstelling het die bevordering van vrye mark-georiënteerde hervormings en die konsolidasie van 'n liberale demokrasie. Gevolglik het buitelandse hulp donateurs liberale ekonomiese beleidvorming onderskryfwat uiteengesit word in die regering se makro-ekonomiese strategie, nl. Groei, Werkverskaffing en Herverdeling (GEAR). Dus het sowel die regering as donateurs prioriteit gegee aan NRO's wat betrokke is in dienslewering, eerder as dié wat geneig is om liberale markbeleid teen te staan. Hulle het ook voorkeur gegee aan NRO's wat meer besorg is oor die norme en praktyke van 'n prosedurele demokrasie in teenstelling met dié wat besorgd is oor die vraagstukke van 'n deelnemende en sosiale demokrasie. Dit het die resultaat gehad dat die openlike politiese en kampvegtersrol wat kenmerkend van die NRO's was gedurende die apartheidsera, beperk is. Internasionale donateurs het, Vla regerings-instellings soos die Nasionale Ontwikkelingsagentskap (NOA), ook die werk van NRO's beperk deur die aandrang op talle bestuursverwante vereistes wat as voorwaarde gestel is vir die ontvangs van finansiële ondersteuning. Talle klein, informele landelike gemeenskaps-gebaseerde organisasies wat die vereiste administratiewe kapasiteit kort, het gevolglik ernstige finansiële krisisse begin ondervind. Daaropvolgend, het NRO-staat verhoudinge sedert 1994 minder konfronterend begin raak. Die meeste NRO's ondersteun die staat se diensleweringsprogramme en dien ook as organisasies wat help om die norme en praktyke van 'n prosedurale demokrasie te vorm. Die studie kom tot die gevolgtrekking dat die voortdurende ongelykheid, armoede en werkloosheid wat geassosieer word met die makro-ekonomiese beleid van die regering se program vir Groei, Werkskepping en Herverdeling (GEAR) sal lei tot In nuwe opkoms van kampvegter NRO's. Voorts, ten einde hulle rol te stimuleer en hulle lewenskragtigheid as organisasies te verseker, kan ons die huidige befondsingsomgewing van NRO's doeltreffend uitdaag. Dit sluit in die bou van die administratiewe kapasiteit van beide die NOA en NRO's, die versekering van NOA onafhanklikheid, en die versekering van die erkenning deur befondsingsinstellings van die belangrikheid van kampvegter NRO's in die konsolidasie van 'n ekonomiese demokrasie.