Why 21st Century Aid needs to be bigger AND better

Dambisa Moyo, Bill Easterly) 2. Aid is great (Jeff Sachs, various aid donors, and to some extent, Oxfam and other NGOs) 3. Hey, I’ve just had this great idea for making aid much better (CGD, Owen Barder, Paul Collier) The first two focus almost exclusively on quantity (although pushing it in opposite directions). The third takes quantity for granted, and tries to improve quality. But I have seen relatively few attempts to take on quantity and quality simultaneously. From the quantity people, that is probably because people who write about aid are usually either fiercely pro or anti. Anti-aid advocates don’t want to muddy the waters by devoting too much attention to how it could be improved; the pro-aid camp is fearful of giving fuel to the enemy if it acknowledges the failings of aid. As for the quality people, they have one good motive for skimming over the need to increase the quantity of aid, and one not so good. The good motive is that unless we improve the quality of aid, it will be that much harder to justify increasing quantity in a time of acute fiscal stress. The not so good motive is that arguing for more aid makes you sound a bit naff/naïve/not clever. But aid is going to come under even greater scrutiny and attack over the next few years, driven by the looming fiscal crunch hitting virtually every donor country. Anyone who cares about aid is going to have to start talking about quality and quantity, including the warped motives for which aid is often given. Oxfam, which I would say has in the past paid too little attention to quality issues in its public messaging, has a new paper out today in the UK which tries to get the balance right. ‘21st century aid: recognizing success and tackling failure’, by Jasmine Burnley, is aimed at public opinion, rather than the more arcane aid debates within the aid industry. So not much wonkery on cash transfers or cash on delivery. Instead, the paper combines a good primer on the basic case for aid and some of its achievements, with a look at some of the ways aid needs to be improved, and some handy myth-busting (or at least myth-qualifying) on the standard anti-aid arguments (aid fuels corruption, hampers growth, squeezes out foreign investment or domestic taxation). What does good aid look like? “Twenty-first century aid is liberated from rich countries’ political incentives and is targeted at delivering outcomes in poverty reduction. Twenty-first century aid innovates and catalyses developing country economies, and is given in increasing amounts directly to government budgets to help them support small-holder farmers, build vital infrastructure, and provide essential public services for all, such as health care and education. Twenty-first century aid is transparent and predictable. It empowers citizens to hold governments to account, and helps them take part in decisions that affect their lives.” Much of this has been said before, but against the backdrop of increasing levels of anti-aid rhetoric, a grown up discussion recognising that aid doesn’t always work one hundred per cent of the time, but when it does is more than worth it, is important to have honestly, and in the open. What does the report recommend? Donors should: “• Ensure aid is channelled to help support active citizens, build effective states as a pathway to reducing poverty and inequality, and support diverse forms of financing to contribute to development. • Deliver aid through a mix of models, including increasing budget support wherever possible, and ensure that a percentage of aid flows are channelled to civil society organisations, to enable people to better hold their governments to account. • Dramatically improve the predictability of aid, by increasing the proportion of aid that is general budget support where possible and by sector support where general budget support is not an option, and limit conditions attached to aid to mutually agreed poverty indicators. • Give at least 0.7 per cent of their national income in aid, and set out how this target will be reached, with legally binding timetables. Developing country governments are urged to: • Reject a culture of corruption, uphold human rights standards, and act in ways which are transparent and open to scrutiny. • Provide legal environments in which civil society organisations monitoring government activities can flourish and respect the independence of non-government bodies like audit offices and the judiciary.” Somewhere, we seem to have lost the ability to simultaneously celebrate aid’s many achievements (at its best, it is an extraordinary act of international solidarity) and think critically about how to improve it. We need to do more of both. and here’s a nice animation on the aid quality arguments ]]>

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6 Responses to “Why 21st Century Aid needs to be bigger AND better”
  1. Dear Duncan, great blog as ever. I would question your “three camps” however. Where would you put my book, which you wrote about in an earlier blog? There is a danger that by classifying books as pro or anti aid we just perpetuate this binary way of thinking – something I was trying to break out of with ‘The Trouble with Aid’. I suppose you could put my book in the third camp, but it would only fit awkwardly. I call my way of thinking “aid realism”, which calls for more aid where it works, and less aid where it doesn’t. Crucially, we need to take into account all the impacts of aid, not just the most obvious ones. Sounds like a no-brainer, but this kind of balanced thinking has been criticised for being “anti-aid”. All the best, Jonathan
    Duncan: Yep Jonathan, I knew any attempt to come up with typologies would do violence to nuance – virtually any book on aid pays some attention to both quality and quantity, but most are heavily tilted towards one direction. And you’re right, on that basis, I would say camp 3 with a dash of camp 1 (as in your call for ‘less and better aid’)

  2. Stephen Jones

    I was interested to see what didn’t make it into the summary. The main document includes the point that Owen Barder has been making recently that aid from rich countries is just one part of development policy, and is probably less important than policies on trade, migration, climate change etc. Yet the summary reduces this to “the right systemic reforms”… if we are going to have a public debate about the quality of aid and how much it is linked to Western politics, shouldn’t the relevance of wider policies on development be emphasised more at the same time?
    Duncan: unintentional oversight Stephen – coherence with non-aid policies is an essential part of a good development strategy – and one I will correct with my final blog on aid early next week

  3. A much needed defense of the value of aid at a time when it is crucially needed. This idea that we should suddenly give up on aid at the precise moment when a) mechanisms for delivering it are improving, and b) the need for aid is likely to increase massively is indeed highly irresponsible. Issues such as climate change, fluctuating fuel and food prices, and water scarcity are going to make ever more serious demands from developing country governments, and simply delegating all responsibility to FDI, tax collection and natural resources rents seems bizarre. At Due South (http://www.iied.org/sustainable-markets/blog/due-south) we´ve been looking quite strongly at the impacts of the global recession on developing countries, and it is becoming clear that the need to adapt to climate change will also demand an ever greater commitment from the international community. Yes, aid has gone wrong on many occasions in the past, but this is not the time to throw the baby out with the bathwater!

  4. Gentlemen, all this is theoretically correct. Aid to develop is a beautiful concept. The big but is that there are countries, the newly industrial countries, that are willing to pay Presidents, top officials and civil servants to get their hands on most less developed countries’ natural resources without all the over sight and control. How would one stop this? One can create local entrepreneurs that can use their county’s resources to finance their own development and allowing the free export of these products to all developed countries. Oh yes, very little of the developed countries allow competition by limiting trade. Developing countries are also to a large extent forced to use aid to benefit the country’s, from who the aid was received, suppliers, contractors and service providers. I am wondering if there is a solution to this in books or discussions.

  5. Robert

    As long as we’re thinking critically about improving aid, as Scott has already mentioned, it seems like a good idea to examine the 0.7% GDP target for ODA. As Clemens and Moss of the Center for Global Development explain, the 0.7% target was originally conceived of as lobbying tool for rich governments and not the result of an analysis of actual need in developing countries. Even the ex post rationalization of the .7% target using the so-called ‘financing gap’ theory has been debunked. Moroever, I also do not think it is fair to conflate Easterly’s work with Moyo’s. I do not think one could accurately characterize Easterly as focusing “almost exclusively on quantity.”