Why should we continue to spend on aid?
Guest blog by Dan Aylward. He is an Economist for the Overseas Development Institute and has recently finished a two-year stretch working in Lesotho’s economics ministry.
I come at this from the perspective of an economist, and one, I like to think, with a conscience. Importantly, I am not looking at this from the perspective of a politician.
The first point I need to make is that the focus in these discussions should be on happiness instead of poverty. Much work in international development leaves this question aside. We impose the goals we think they should want on the developing world: get richer, live longer. Poverty only seems so repugnant to us because we associate it with destitution and misery. But wealth is merely a means to an end. True, there is often a link between income and happiness, but as the UN’s World Happiness Report has recently shown, it is not solid. Costa Rica is the world’s 12th happiest country, but only the 67th richest. Japan ranks 13th in GDP per capita, but only 44th on happiness. Often, it is our position within our immediate society, which makes us happiest, and inequality can be more detrimental than poverty. And health professionals might well remember that not everyone wants to live forever.
Without entering into a protracted debate on the efficiency of aid spending, it is worth remembering that money goes a long way in the developing world, and that, like business, for every successful intervention there will also be failures, but the rewards of success can be far greater than the costs of failure.
Let me present three arguments for spending on international development.
The first is based on an obligation. This is not a particularly pleasant point to digest because it requires that we consider ourselves, our past and begin to feel a little guilty. With that warning, I’ll get straight to the crux of the matter. We in the UK are pretty well off, and part of the reason we have achieved the levels of development, which we currently enjoy, is because along the way we systematically exploited the people and resources of a number of other countries and then dumped them to struggle on.
And if you think all of that is in the past, don’t forget that economic development is cumulative. Without this dubious past, we wouldn’t be the economic power we are today and wouldn’t be in a position to be making these decisions.
The second argument is that economic development is mutually beneficial. It is used a lot in the US when people push for extension of the African Growth and Opportunities Act, which gives African goods tariff free entry into the US.
As everyone knows, crime and terrorism flourish in unstable environments, and nothing creates instability like poverty, desperation and vulnerability. And economic development seems to generally lead to a decrease in fertility rates, which will benefit us all in the long run.
But also consider what aid spending goes on. Large portions go to general budget support, and of course there are still the handouts of grain during droughts. But a large proportion also goes on technical assistance, which keeps a good number of DfID employees and British consultancy firms in business.
The last argument I want to put forward is based on altruism. Namely that we should remain committed to aid spending simply because it is the ethically right thing to do.
There are certain things that happen in the world, which I believe most people will agree, are unacceptable. Children should not die of preventable diseases because they cannot afford the medicine. Innocent people should not be imprisoned for years because they cannot afford legal representation and the judicial system is so corrupt or dysfunctional they are forgotten. Mothers should not have to choose which of their children can go to school and which must work in the fields. Rape and mutilation should not occur where there is conflict over natural resources. Potential world business leaders should not be denied opportunities to lift themselves out of poverty because they have no access to credit. No one should starve to death.
This Government has pledged to maintain aid at 0.7% of GDP. That sounds like such a small fraction, when you consider just how much better off we are than most of the world. That puts us as the 6th most generous nation out of the OECD, and that’s something we should be proud of.
The Institute of Development Studies survey revealed that 64% of people said supporting the poor at home should take priority over helping the poor abroad. That puts me in a minority. I fully accept that the misery caused by poverty in the UK can be as severe as poverty in the developing world, but whilst those unacceptable occurrences are still part of the daily lives of a billion people, I believe they desperately need our help.