Aid Politics

updated December 2016

As a new political mood sweeps across the traditional donor countries in Europe and North America, foreign aid budgets are coming under increasing scrutiny. Critics suggest that the persistence of high rates of extreme poverty in sub-Saharan Africa and South Asia implies that long term development aid is ineffective.

Campaigners pressing for enhanced commitment to foreign aid can point to many impressive success stories. Aid has made a significant contribution to the attainment of the Millennium Development Goals for eliminating gender disparity in education, increasing access to safe drinking water, reducing infant mortality and preventing millions of deaths from AIDS.

Aid budgets also cater for humanitarian emergencies, such as the ebola health crisis, often in response to public pressure on donor governments, accentuated through the lens of global media coverage.

The response by many governments to criticism about aid has been to sustain their budgets but redirect funds towards global issues of “national interest”. Prevention of terrorism, control of migration and subsidy for private sector engagement top the list.

The European Union’s Partnership Framework has mobilised significant funding packages for countries across the Sahel region, conditional on efforts to persuade potential migrant workers, and those already in transit, not to attempt a journey to Europe. The UK government, now second in the list of providers of foreign aid, expects to allocate 50% of its budget for 2016/17 to fragile and conflict-affected states, with migration and “securitisation” concerns uppermost.

Many international NGOs have expressed reservations that vital aid resource is being diverted from its core purpose of global poverty reduction. The beneficiary countries themselves are hesitant over transactional aid packages which so blatantly reflect the imperatives of the donor government rather than their own.

The traditional aid model is already questioned by African governments, wary of their dependency on foreign aid and resentful of the strings attached to most grants and concessional loans. These conditions often demand adherence to templates for economic management, observance of human rights and democracy, and project work for the donor’s own corporations and consultants.

China’s strategic aid model is more popular but its offers of finance and construction carry conditions that loan repayments are realised in the equivalent value of oil, timber or other natural resources.

From whatever source, these political priorities diminish the the moral dimension of foreign aid, the altruism of helping the poor. One of Africa’s largest aid recipients is Ethiopia, strategically important for its proximity to Sudan, Eritrea and Somalia, but with a lamentable record on political freedoms, according to Human Rights Watch.

Nevertheless, even the most passionate advocates of foreign aid accept that it is an insufficient tool to tackle poverty. Donor countries should additionally address the structural causes of the global divide – unfair trade and subsidy regimes, restrictive enforcement of intellectual property rights for technology transfer, cross-border environmental damage and evasion of corporate tax.

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Interview with Professor Easterly
A well-known critic of foreign aid, Professor William Easterly of New York University sets out his arguments

from Institute of Economic Affairs


The International Aid Transparency Initiative explains the value of its work.

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