Why Philip Davies is right about international aid...

****

Although he won't thank me for it!

If we stopped every single penny of government spending on aid (by which we mean our money going to help people in poorer countries) we would still be spending more than that much-vaunted 0.7% of GDP on aid.  And this is why:

Just one in 20 households in the UK make remittances, which are transfers of cash back to countries of origin to either families or communities. Yet, even though they are small in number, with an average remittance worth £31 per week, the World Bank estimated that last year some $23.16bn was transferred in remittances from the UK.

Bear in mind that the over-protected DFID budget is considerably smaller than this and you begin to understand that the whole pretence that we need to spend more on aid is just a sort of metroliberal scam. And those remittances from immigrants and refugees - getting on for £20 billion - work much harder than the generosity of governments. That money goes directly to real people, it doesn't need officials to administer it or aid workers to manage it. There's no need for grand plans or strategies. And it works - the people getting remittances spend it on improving their lives. On building better homes, on buying a bicycle or paying bus fares.

Because of the last fifteen year's worth of immigration we don't need to lavish more money on aid. But instead we indulge the 'fair trade' folk, the people who knit jumpers for Oxfam and the frowning people who tell us that 'free trade' damages these poor places. And we bung more money in the aid pot, money that does little or no good in poor places but, like the immoral scam that is fair trade, pours gentle soothing honey on our middle-class guilt about having a nice house, a car and two foreign holidays. We should stop - it doesn't work. Not like those little remittances to friends and family from recent immigrants:

Analysis of household survey data show that remittances have reduced poverty and resulted in better development outcomes in many low-income countries. Remittances may have reduced the share of poor people in the population by 11 percentage points in Uganda, 6 percentage points in Bangladesh and 5 percentage points in Ghana. Studies in El Salvador and Sri Lanka find that the children of remittance recipient households have a lower school drop-out rate. In Mexico, Guatemala, Nicaragua and Sri Lanka children in remittance recipient households have higher birth weights and better health indicators than other households.

.....

Evidence that bilateral aid is wasteful?

***

Not that it's a surprise:

Documents recently made public by the UK government reveal the cost of poverty reduction in the Millennium Villages Project, a self-described “solution to extreme poverty” in African villages created by Columbia University Professor Jeffrey Sachs. The project costs at least US$12,000 per household that it lifts from poverty—about 34 times the annual incomes of those households.

In fact, as this author makes clear, the level of dissembling by the DFID on these projects is even greater:

Can the Millennium Villages Project permanently triple the incomes of many people, or even any people, at the sites where it works? We can’t even say whether or not that has happened temporarily, much less permanently, because the project has never released any data about what has happened to the incomes of the people it experiments on. The project has been collecting income data for the past seven years. But hasn’t released any data about how incomes have changed over time. It has chosen to release other data on changes in non-income social indicators, but not the income data.

Can we guess that this high profile project promoted by a celebrity academic and funded by the British government simply isn't working?  Indeed the project appears to be little different from simply handing over cash:

The Millennium Villages Project is probably causing short-term improvements in things like access to clean water and skilled birth attendance at the sites it works in. My co-author and I showed this in a paper (available here, peer-reviewed version here), while we revealed that the project typically says those short-term effects roughly twice as large as they really are. But causing short-term improvement of some kind with charity does not make a development project successful.

...

Why we should question the value of bilateral aid

I’ve always believed in the value of international aid, that it is right that wealthy nations should assist less wealthy countries. I absolutely believe that, most of the time, governments are better placed to provide emergency assistance than private individuals or private organisations.

However, the problem with bilateral aid – where country X gives money to country Y – is that it becomes quickly a tool of realpolitik rather than a genuine act of philanthropy. Even where, as is the case with the UK, the use of aid as, in effect, an exporter subsidy is no longer allowed we can see how decisions relating to aid become wrapped up in other considerations – votes on international bodies, support for military action, clamping down on migration, and even investment decisions in the home nation.

The idea that Government is a benign, innocent compared to non-governmental bodies or international bodies is a complete misperception. And this self-interest extends to the people employed – the hundreds of people administering our huge aid contribution to nuclear armed India will be working tirelessly to try and prevent that subvention being cut.

Finally bilateral aid has to go via the government – there is no alternative as it is a sovereign transfer. And this means that, however well meant the decision to support a struggling place might be, the corrupt government there will take its cut of the aid before it arrives with those it is intended to assist.

Sadly, we do not apply ourselves enough to these considerations, to making the aid we give effective. Instead – much like the “I buy fair trade” argument – we shout around about how big the budget is rather than about the real outcomes of the work funded by that budget. I really don’t care whether the UK spends 0.5% or 0.7% of GDP on aid – what I care is that the money actually does some good.

Taking this view doesn’t make me some kind of moral leper, someone who doesn’t care about the development of Africa or the suffering of the world’s poor. Indeed, those who advocate increased aid budgets but support the subsidising of western agriculture should look to their own contradictions – the Common Agricultural Policy does more damage to Africa than our aid programmes do good. And much the same can be said for other market distorting actions of the developed world – the structure of financial regulation (making it ever more difficult for developing countries to build a financial sector – even massive countries like India), the subsidising of basic industries, the dumping of production surpluses in the name of “aid” and much else besides.

If we really cared about helping Africa transform we would start removing these barriers, we would concentrate on opening up our home markets to the products of poorer countries, we would incentivise moving production upstream (processing and packaging the coffee in Ethiopia rather than Banbury maybe) and we would concentrate our aid on disaster relief, educating women and disease prevention.

Instead we choose to wave and shout about how good we are and how much money we spend. I find this sad.

...