The Great Aid Mystery: Our rulers must know that development aid doesn’t work. So why do they throw money at it?
One of the more bizarre mysteries of contemporary British politics is the ironclad, almost fanatical intensity of the government’s commitment to foreign aid spending and the activities of DFID, the Department for International Development.
It is bizarre because the Prime Minister talks about foreign aid as if it’s all about famine relief and saving children’s lives. But he and his Cabinet are intelligent, worldly people and they know that the real world of aid rarely resembles the one celebrated in DFID pamphlets and Oxfam ads. They know that most aid is ‘development aid’ intended not to help in emergencies, but to foster prosperity.
They also know that this development aid is at best useless and at worst counterproductive. A quarter of Britain’s foreign aid goes as ‘budget support’ into the treasuries of some of the world’s least competent, honest or responsible governments. Even more goes to multilateral institutions, like the World Bank or the EU aid body that Clare Short described as ‘an outrage’, ‘a disgrace’ and ‘the worst development agency in the world’.
After 60 years and $3 trillion of development aid, with one big push following another and wave after wave of theories and jargon, there is depressingly little evidence that official development aid has any significant benign effect on third-world poverty. The Tories know this. They’ve read William Easterly and Robert Calderisi, who argue that the cash we dole out has enriched privileged Westerners and kleptocratic third-world rulers more than its intended beneficiaries. Moreover, they’ve seen how South Korea and Taiwan have risen from poverty to prosperity and they know how small a role foreign aid played. So why do they still insist on this enormous, ‘ring-fenced’ aid budget?