Nick Herbert MP Chair's the new think tank, The Project for Modern Democracy. At the start of December 2017 they launched their first report of the Global Development Challenge project. The report on the effectiveness of development aid suggests it has a long-term positive effect on growth and poverty reduction, and that criticism that aid does not work is unsupported by the weight of academic evidence.
Nick talks about the report below and argue's that it isn't whether aid works, it does, but how it can work better.
The question isn’t whether aid works. It does. The question is how it can work better.
AIDS is a disease that still kills a million people a year globally, but the numbers are reducing. With new drugs, and programmes to get them to the poorest in the world, we could beat AIDS and save lives. But that won’t be possible without public funding. Conservatives are rightly sceptical of government intervention and spending taxpayer money except where it is necessary. So let’s be clear: to help the very poorest in the world, international aid is essential.
Aid can never be the main driver of development, as it represents a fraction of the wealth generated by private investment and trade. Wealthy countries could do more to accelerate the growth of developing countries, including by lowering tariff barriers and cracking down on tax havens.
But aid can help to create the conditions for growth: stabilising countries ravaged by conflict; strengthening the rule of law and democratic institutions; helping to make people healthy so that they can work, and supporting essential infrastructure and skills. This doesn’t just take humanitarian relief, which even the most sceptical concede should be maintained. It means development aid which critics relentlessly attack.
It’s easy to point to individual aid projects that didn’t work properly, or should have been questioned in the first place. But too often critics leap to the conclusion that aid doesn’t work at all, or even is positively harmful. A new report published by The Project for Modern Democracy, an independent think tank which I chair, debunks this claim. Carefully surveying 50 years of academic research, the 100-page analysis shows that, overall, aid helps to increase economic growth and reduce poverty.
Even modest amounts of aid can add as much as 1.5 per cent to a recipient country’s annual growth. That’s actually greater than the UK’s forecast growth for each of the next 5 years. And it adds up over time: one study suggests that the average developing country would be 30 per cent poorer today had aid not been given over the last 50 years.
The report is also clear about where aid has problems, such as when the support received by countries fluctuates unpredictably, or where a lack of co-ordination between aid agencies harms effectiveness. It examines the much-cited issue of corruption, where the evidence is mixed. Aid can help to reduce corruption, which is often more a symptom than a cause of poverty. It is one of the paradoxes of aid that it is hardest to deliver in the countries where it is most needed.
Private economic activity tends to benefit the better off, while aid particularly benefits the poorest. Aid is also essential where private investment is not available and markets fail, such as for research into the drugs and technologies we need to beat diseases like tuberculosis, which is still killing 1.7 million people a year. A recent World Bank report estimated that the projected rise in antimicrobial resistance – in which TB would play a major part – could create economic losses over the 2015-2050 period totalling USD 85 trillion in GDP and 23 trillion in trade, and suggested that there could be an additional 24.1 million people living in extreme poverty by 2030 as a result. Global health security is rising in importance, and preventing disease is much more cost effective than curing it.
Nothing is more damaging to growth than conflict. As the economist Sir Paul Collier said: “War is development in reverse”. Visiting Lebanon last year, I saw how effective British support was in securing the border with Syria to keep ISIS out and to help deal with the refugee crisis. That in turn helps keep us safe and extends our sphere of influence. When he led US Central Command, General James Mattis – now US Secretary of Defence – famously said: “If you don’t fully fund the State Department, then I need to buy more ammunition.” British aid doesn’t only help the poorest in the world: it gives us soft power which promotes our vital interests abroad, and it contributes to our security.
Conservatives get hung up on the 0.7 per cent GNI target for aid spending, now enshrined in law. Some are concerned about ring-fencing budgets and the precedent it sets, and it wasn’t long before there were calls to meet the two per cent NATO target for defence spending, too. Others worry about the increase in the aid budget when others are being cut. At £13 billion a year, it is not small, even if it is less than one per cent of our national income. These are not unreasonable concerns when we are still running a budget deficit.
But critics should stop pretending that every problem with public services could be solved by cutting the aid budget. The savings have been spent multiple times in multiple interviews for every good cause: defence, the NHS, or tax cuts … the list is long. And let’s just consider the realpolitik. We wouldn’t have a Commons majority to repeal the 0.7 per cent target even if we wanted to. The Conservative Manifesto committed to maintain it. So did the Prime Minister. And while it is surely a mistake to measure compassion by the quantum of public spending, cutting the aid budget would reinforce every stereotype about our Party which we know we have to deal with.
There is a good case for introducing more flexibility in how the target operates. And we have rightly addressed public concern about how aid is spent. David Cameron’s administration put in place a robust new watchdog, the Independent Commission for Aid Impact, to ensure that the money is well spent. Successive Conservative DFID Secretaries have tightened the rules. In fact, our aid is one of the most transparent forms of government spending – every project can be tracked online.
Rather than impaling ourselves on a debate about a globally-agreed aid target, we should do more to promote the good which aid spending and this Conservative Government are doing. By all means let’s make sure that aid is spent well, but it’s time to junk the cheap and groundless shots about aid being a waste of money or failing to help those most in need. The question today is not whether aid works, but how it can work better. Evidence shows that aid is a powerful force for good in the world, and has unquestionably saved or transformed millions of lives. The challenge for aid donors and recipients alike is to work together to improve aid’s efficiency and effectiveness, and continue the fight to make poverty a thing of the past.
Nick Herbert, MP for Arundel, Chair of Project for Modern Democracy