The Gates are quite correct that we shouldn't ordinarily worry too much if some of the aid is siphoned off into government corruption. But while if 2% of the money goes into the creation of some official's new manor that isn't too bad, there are much worse things that money can go to.
In the Great Lakes Crisis[1] the perpetrators of the genocide in Rwanda were charging aid organizations for access to the the refugees they controlled. They were using the money to try to buy enough weapons to re-conquer Rwanda and finish what they had started. Most private aid organizations wisely decided they weren't willing to pay the genocidaires off, but the UN was willing to and the army of the new Rwandan government ended up invading to stop them, touching off the Congolese civil war.
Paying for access to refugees can also turn refugees into a de-facto lootable resource that can help sustain conflicts the same way that diamonds can.
Corruption in stable states isn't a huge problem for aid (development is another story), but it's interactions with aid are much worse in unstable areas.
In the Great Lakes Crisis[1] the perpetrators of the genocide in Rwanda were charging aid organizations for access to the the refugees they controlled. They were using the money to try to buy enough weapons to re-conquer Rwanda and finish what they had started. Most private aid organizations wisely decided they weren't willing to pay the genocidaires off, but the UN was willing to and the army of the new Rwandan government ended up invading to stop them, touching off the Congolese civil war.
Paying for access to refugees can also turn refugees into a de-facto lootable resource that can help sustain conflicts the same way that diamonds can.
Corruption in stable states isn't a huge problem for aid (development is another story), but it's interactions with aid are much worse in unstable areas.
[1]http://en.wikipedia.org/wiki/Great_Lakes_refugee_crisis