Is Aid Defensible?

Today, the ever interesting Phil Ritchie blogged on the issue of international aid. As many people will know, the current British Government have promised to maintain the level of overseas aid at a fixed amount (0.7% of gross national income) until 2013. Today however, it leaked out that the minister of defence, Liam Fox, would like to see the government step back from this promise.

Phil’s response was that the government should in no way cut the amount which is spent on aid and he cited a very eloquent piece from Cranmer to support his position. Of course, no caring person, above all a Christian, could countenance a rich country like ours cutting their aid budget – or could they?

I certainly don’t support Liam Fox, who is no doubt leaking information to serve his own political agenda. However, I do think that it is right and proper that we do have a wholesale review of our commitment to overseas aid.

Before going any further, I should mention that I spent six years living in an African village without electricity and running water in order to work with the people there to bring mother tongue education to the area. This doesn’t mean that my opinions are correct, but it should show that I have a deep and life-long commitment to development work.

The problem with both Phil and Cranmer’s articles is that they concentrate on how much money we should spend on aid. Neither of them looks at the impact that the money has on lives of the recipients. Surely the point of foreign aid is not just to spend money, it is to make a positive difference in the lives of people.

Whatever the motivation for aid, there are a number of issues which need to be addressed. The first is that an awful lot of aid money is actually wasted. A year or so ago, I quoted from the expat wife blog on this issue, I’ll repeat part of the quote here:

What people in UK may not know is that right here, in East Africa and Nairobi, within the lucrative world of ‘aid to Africa’, given shape by huge organisations such as the UN, the World Bank, USAID, DFID etc. the world has gone officially crazy for the past ten years. Well staffed aid organisations with numerous highly qualified and trained staff running hundreds of programs routinely farm out work to external consultants, who then hire more consultants to organise their conferences, write reports, run their workshops and roll out their aid programs and schemes. It is what is known as the gravy train. (Read the full article.)

The other key issue is that there is mounting evidence that not only does government aid not do much good, it can actually be positively harmful. Dambisa Moyo in her must read book, Dead Aid: Why aid is not working and how there is another way for Africa points out a number of ways in which aid programmes damage the recipient countries. These include reducing government accountability to the populace and destroying local entrepreneurship and initiative). The blurb says:

Dambisa Moyo argues that the most important challenge we face today is to destroy the myth that Aid actually works. In the modern globalized economy, simply handing out more money, however well intentioned, will not help the poorest nations achieve sustainable long-term growth.

We have a problem in that the value of aid has become an article of faith which we are no longer allowed to question. However, there are huge questions about the value of government aid and even such sacred cows as fairtrade goods and celebrity campaigns are not without their problems.

The issues raised by government aid are far more nuanced and complicated than most people give them credit for. I would strongly recommend that anyone who is interested in the subject reads Moyo’s book (or at least watches the video below). Other good resources are Bill Easterly’s The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good. Two good blogs to follow are Aid Watch and Good Intentions Are Not Enough. This article (though not about aid) gives an excellent overview of the way that the complexities of poverty have led to violence in Ivory Coast.

Of course, it is right and proper that a rich country like ours (despite all of the doom-mongering around the recession) should help people in poorer nations. The purple prose in Cranmer’s article makes a serious point. However, we should shy away from making the automatic assumption that giving government aid money is actually helping – the evidence is at best mixed. However, if we did something serious about removing trade barriers so that developing nations could export their goods fairly to the West and then stopped dumping our own subsidised goods on overseas markets and putting local farmers out of business, we could make a huge difference in the lives of people across the globe.

Perhaps the British government should maintain its current aid level, perhaps not. Whatever we do, the decisions should be made on the basis of evidence, not simply on sentiment.

You can read all of our posts tagged with ‘development‘ here.

8 thoughts on “Is Aid Defensible?

  1. A topic dear to my heart. I agree with much of what you say. The voice that is often drowned out by all the do-gooders is that of the African who is engaged in commerce or literacy or community building. Apparently they are too helpless and unsophisticated to adapt to the environment they have lived in for years. Simple Western solutions seldom aid complex African realities. For that reason Moyo is refreshing although I don’t pretend to understand half of what she says.

  2. I agree that we often get hung up in throwing money at poverty rather than asking if it is doing any real good. And for every right wing aid naysayer (like Moyo) there will be another on the left who says the exact opposite (e.g. Sachs), both replete with case studies that back their position. Much heat is generated, but little light.

    I am reading an interesting book at the moment called “Poor Economics” – http://www.pooreconomics.com/ – which is written by a team of economists, including Abhijit Vinayak Banerjee and Esther Duflo, who have tried to answer the question of what actually works (if anything). Surprise, surprise, there is no straightforward answer, because people are complicated and don’t do what theory & ideology dictate! As you’d expect.

    Real poverty alleviation is never a blanket, one size fits all approach – it requires a real understanding of how people live, what their actual circumstances are, and whether you can help them out of poverty, or whether that help will make things worse for them. But the answer will be different every time. Which is not what big donors and governments really want to hear.

    I think this debate will go on, but aid headline figures are meaningless. It is the results that aid achieves on the ground that really counts.

    Well blogged Eddie!

  3. As a man committed to business solutions to poverty in Africa I completely agree with the challenge to the “aid industry”, which has many negatives that must be addressed. But similarly, the overly simplistic Aid: all good or all bad, binary choice that is so often presented by the critics of aid is very misleading; containing a baby with the bath water danger. Which I why I think you conclude by sitting on the fence. I came to Africa focused on business alone, I’m now convinced that in certain contexts optimal business solutions to poverty will only be achieved in conjunction with some aid – both-and instead of either-or – see our website http://www.bargateconsulting.com

    In this regard, your referencing of only Easterly and Moyo represent just one side of the argument. I found Paul Collier, The Bottom Billion, far more helpful – particularly the way that he uses robust quantitative analysis of large amounts of data to explore the challenging questions and address the assumptions brought to the debate rather than relying on soft anecdotal evidence to confirm a presupposition, as I find others can be prone to do…

  4. Thanks Ben and Steve for suggestions of reading from ‘the other side’. I am sure that Moyo and Easterly are not the only voices that need to be heard in this debate, but I’m not familiar with the others – so it will do me good to expand my view.

  5. Many thanks for your post Eddie, you may be surprised to hear that I don’t disagree with the thrust of your argument. My post was about our commitment to aid in response to a particular argument put forward by Liam Fox but that doesn’t preclude considered reflection on where that aid is targeted and how it is used. The problem with Fox’s argument is that it was not about the good or damage aid does but about committing the percentage at a time of financial constraint. He also seems to want the freedom to draw on the aid budget for initiatives that could not really be regarded as aid and in some cases may be the sort of bad practice that critics attack.

    The fact that aid has not been used wisely in some circumstances, or has been used to reinforce the economic supremacy of the giver doesn’t mean we shouldn’t give, rather that we should examine the way we give and our motives in giving.

    I am familiar with some of the critics of overseas aid that you cite and while they raise some legitimate concerns I have not always found their arguments convincing. Moyo in particular is someone whose arguments I have found weak in debate. If we are going to scrutinise the whole issue of aid then it is important to examine the motives and agendas of the critics as well as the proponents.

    Anyway, thanks for raising another important aspect of the aid debate.

  6. Good post, but I found it good for a different reason. I blogged about this over at JustinLong.org because I think it highlights the need not just to measure numbers, but to measure the right numbers–something that many people in many different contexts often don’t get quite right.

  7. Nicholas Kristoff has written an Op-Ed in yesterday’s New York Times on the role of economists and research in identifying whether aid works, and if it does, what aid works best – http://nyti.ms/iPAofV.

    Who knew that de-worming school children had a greater impact on educational attaiment and later income than building new schools? Also some links in there to other useful sites on the subject such as http://www.poverty-action.org/provenimpact/fund

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