https://dfid.blog.gov.uk/2011/03/04/what-should-we-make-of-the-new-uk-aid/

What should we make of the new UK aid?

The DFID paper – Changing lives, delivering results – sets out a new direction for UK aid. Click for PDF.

The Department for International Development is already the most respected of the country-to-country development agencies. But in the past it has been distracted by extraneous domestic political interests. In Andrew Mitchell, the department has a Secretary of State who is manifestly committed to the job in hand. He has brought a new agenda which can, I think, be summarised in four elements: greater accountability for the results of aid, concentration on fragile states, greater emphasis on the private sector and a cross-government approach so that other government policy instruments can also promote development objectives. So, what should we make of this agenda?

Greater accountability for the results of aid is a political imperative: how can an increased aid budget be justified in times of unprecedented austerity unless it is demonstrably well used? Yet convincing measurement of impact is far from straightforward. The Gates Foundation insists on quantifiable impact for all its finance, but this is made feasible by restricting what is financed to a relatively narrow range of health-related activities such as immunisation. DFID can and should adopt this model for much of its aid: the pay-off to well-used humanitarian spending can be spectacular and British taxpayers should indeed be able to feel proud that they are achieving concretely measurable improvements in the lives of the planet’s poorest people.

The UK is working to avoid state failure in countries like Yemen © Tim Smith / Panos

But restricting aid to the readily measurable would rule out some of the most important objectives. For example, given the enormous costs of state failure, helping to avert it is surely a use of aid of which the British public would approve. Yet attempting to quantify the number of states where failure has been averted as a result of UK aid is self-evidently an impossible task.

The answer is surely a matter of balance, and that almost-banished concept of common sense: DFID should have a portfolio including both the readily measurable humanitarian and the less-measurable strategic. The department has established a highly credible independent panel to assess the effectiveness of British aid, while scaling down the budget for self-promoting departmental advertising: surely these are moves in the right direction.

As to greater concentration of the international development effort on the poorest countries and fragile states, how could I do other than support it? It was the core theme of The Bottom Billion. China does not need British aid: indeed, it hasn’t needed it for many years. But, (and with development policy there is always a ‘but’), many fragile states are misgoverned and so making aid effective in such environments is demanding.

While DFID’s aid budget is set to rise, its administrative budget is set to fall. Spending more in more challenging environments – while increasing effectiveness – will require a radical rethink of how aid is delivered on the ground.

A greater focus on the private sector is long overdue. Credit: Russell Watkins / DFID

Greater concentration on the private sector is long overdue: DFID’s concerns have been too narrowly focused on the public sector. An agency whose purpose is to help the economies of poor societies to develop should have a substantial proportion of staff whose core expertise is the promotion of private enterprise. Above all else the poorest societies need jobs, and jobs in sufficient numbers can only be generated by the private sector.

Finally, development policies should indeed extend beyond aid. An example – and a good starting point – is to insist that G20 companies do not undermine governance in the poorest societies by bribing their way into contracts, or by accepting money that is manifestly looted from the public purse. The latest expose from Global Witness illustrates the scale of the scandal: the son of an oil-enriched African dictator has just commissioned a $300m yacht. An oil company looked the other way while public money was looted, a bank gratefully accepted the deposit, and a German shipyard gleefully accepted the order.

Unfortunately, the UK has not done enough to stop this in the past: only one prosecution in ten years (and that because the company asked to be prosecuted!). DFID has now got the message: it has to take the lead in getting other government departments to act.

Please note, this is a guest blog. Views expressed here do not necessarily represent the views of DFID or have the support of the British Government.

23 comments

  1. Chris Jordan

    One way in which aid can have a quantifiable impact, whilst also increasing accountability is to invest in countries domestic tax systems.

    DfID spent £20 million on improving Rwanda’s tax collection – resulting in tax revenue there quadrupling to over £240 million since 1997. Crucially, this helps Rwanda become less dependent on aid to build the schools and hospitals it desperately needs. This is aid as a hand-up, not a hand-out.

    But this agenda is about more than just building capacity. The OECD estimates that developing countries lose three times more to tax havens than they receive in aid. Recent ActionAid research has shown how multinationals like SABMiller use tax havens to deprive African countries of millions in lose tax revenues each year.

    If the UK led the international charge to end tax haven secrecy and to make multinationals more transparent in the way they report their finances, UK aid would be much more effective than it is currently.

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  2. Simon Batterbury, U. Melbourne

    Paul, if you look at the two DfID review documents, you will not find ‘livelihoods’ mentioned once, and almost nothing on agriculture. So, while there is a move from supporting the public sector , which resulted in many ‘capacity building’ projects from 2002 to more support for the private sector in these proposals, I fail to see where the actual, direct assistance to very poor people, particularly in rural areas, is going to come from. This for me was what DfID did well prior to 2002, before livelihoods work was wound down as being too costly and difficult (health and education in DfID allegedly did not care for the sustainable livelihoods agenda). In addition, where is our support to the poorest of the poor countries? Niger is going, East Timor is not there. Why is India on the list, if China is leaving it?

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  3. Paul Spray

    Andrew Mitchell says very powerfully at the start of the bilateral report – “Even in these tough economic times, this Coalition Government will not balance the books on the backs of the world’s poorest people.”

    The private sector push is welcome – but I would like to see the stress on more investment complemented by a focus both on smallholder agriculture, and on tackling the way that oligopolistic buyers in Europe pass risks and costs down the supply chain to producers in developing countries.

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  4. rick davies

    Re “The department has established a highly credible independent panel to assess the effectiveness of British aid” They may well be worthies of one kind or another, but looking through their short biographies I cant find much evidence of any significant experience in the evaluation of development aid, or evaluation of any other kind. How then will they recognise whether they are securing value for money in the evaluations they are commissioning?

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  5. Alex Weir

    Paul Collier – your article is quite honestly whitewash – 2/10.

    I quote from the pdf document – ‘UK Aid: changing lives, delivering results’ – ‘We will help make elections more free and fair in 13 countries with more than 300 million voters’ . Pathetic – there are real workable practical Fraud Proof Voting Systems out there – and you cannot adopt and work with such systems. In extremis, UKAID could develop their own FPVS…. It looks like Mitchell and the political masters Cameron and Clegg have decided that ‘Democracy can be a Dangerous Thing’ (actual quote is from Philip Barclay, FCO, formerly Harare Embassy).

    No – the incompetent failures of UKAID are deliberate – UK Gov does NOT want Fraud Proof Elections in the Third World. Money, Resources and Geopolitics are too important to allow that…

    The Arabs have a saying ‘If 2 fish are fighting somewhere in the sea, then the British are somehow involved’. Seems like they may be correct….

    Mr Alex Weir, London and Harare

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  6. What Should we make of the new UKAID? | alexweir1949

    [...] What Should we make of the new UKAID? [...]

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  7. Kate Melville

    I watch this debate with interest, as a lay person, a British taxpayer. It seems to me that money spent on the ground making a difference to people’s lives is enormously important, and that DFID needs to spend some of its energies explaining to the British public the value of investing in overseas aid projects. To explain also means to communicate effectively – investing without quantifying or communicating could be nicely altruistic, but it won’t attract further investment or explain to people what works or convince them their taxes are well spent.

    Also, while being able to quantify impact is important – and will support arguments at home – sometimes the investments and infrastructures are not set up at the outset with assessment in mind. Ways of measuring ‘Return On Investment’ (ROI – or any other buzzword for the same careful planning) should be built into all aid projects so that the evidence for its benefit can be seen. For example, DFID-supported RIU http://www.researchintouse.com/ is clearly having a great impact in all its projects, and communicates them well, even if its success isn’t easy to quantify.

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  8. ayo simpson ilesanmi

    The new strategies were well thought out, especially the recourse to the need of focusing on the private sector in advancing aid and getting real value for funds expended but the challenge is that development agencies have too much trust or are teleguided by the nono-performing governments in most under developed countries of the world.The truth is that employment generation will touch at the heart of poverty in most of these countries, if only the private sector is empowered to create & generate wealth.My experience in Nigeria shows the urban un employment rate is alarming, with graduate of 15-20yrs unable to secure employment. The new direction is re-training and empowerment which the development agencies can collaborate with local financial institutions. In the rural areas, more of sustainable technic will include empoering cooperatives and access to credit.

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  9. Jiesheng

    The focus on the private sector is welcome but this should not be at the expense of ignoring the role of the state or else you will be heading back to the neoliberal doctrine of the 1980s.

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  10. Divakar

    Countries like India are and will remain important for DFID, simply because of the extent of poverty. While all of DFID aid is a drop in the ocean relative to domestic household savings in India, there is a value-addition to DFID’s preoccupations, though by no means in all aid programmes. The latter is so, because the current M & E systems of DFID-India relative to measuring effectiveness of aid and its delivery is hardly worth writing home about and is susceptible to window-dressing.

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  11. Peter Balacs

    I tend to agree with the comment of Rick Davies regarding the qualifications and experience of the independent panel to assess aid effectiveness. Perhaps this is why the actual work of the evaluations is to be contracted out. Is one surprised? No, but sad. Contracting out is what DFID seems to do – and has been doing since I joined too long ago – possibly because its staff are so busy examining and reporting on themselves that there are too few resources left to maintain an appropriate level of in-house professional expertise. We used to be “on tap, but not on top”, but we didn’t, I didn’t mind. I believe an apt phrase has gained currency within DFID: “more with less”. The question is whether they – and the independent panel – have the expertise to select outsiders who will do a good job and to make an informed assessment of their work.

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  12. herbert mcleod

    Accountability for the results of aid should not be conceived merely in terms of producing quantifiable measurement of development results. My worry is that important if not crucial, areas then lose out to more easily quantifiable goals such as immunisation rates. A head count immunisation rate in a flawed health delivery system will yield bogus figures, or simply deal with symptoms rather than attack the root of the problem which in this case is likely to be weak governance in the health sector.
    It all begins with a clear definition of the results expected. When this is done comprehensively and accurately, measurability of impact will no longer be a criterion for intervention. And for fragile states, governance, this not so easily measured area, will get the priority it deserves for aid allocations.

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  13. Kawalya

    Hello and very much thanks to the blogger and the wonderful comments from the readers.

    However, much of this seems to be focused on the UK strategy (donor strategy) and to me is only practical if only and only if the UK (donor) had such a muscle to effect it; which unfortunately is never the reality on the ground where the donor and the do-nee (aid recipient) often have to come to terms all throughout the projects’ lifetimes.

    So, what do the other parties (the poor governments UK is assisting, etc) have to say in regards to UK gov’t aid, its work, etc and what is their strategy towards, delivering results, accountability and transparency, working and maintaining the partnership, etc??

    Could we also have access to their summarized white papers so the stake holders can compare notes, write comments, etc, etc??

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  14. Abayneh Girma

    I agree completelywith the four elements in conducting development agenda in developing countries. However, the big challenge would be how to instrumentalize or make them operational on the ground at the field level. Like who to work with? what leverage and entry points to use? who should count in this- the affected population in the communites and their basic organizations? NGOs and other civil society organizations? committeed individuals? private sector with clear corporate social responsibilities? who should we count on with real legitimacy?

    Abayneh

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  15. Ruairi Nolan

    As Collier has previously demonstrated, the costs of conflict to the human development of countries are devastating, so the increased focus of DFID on fragile states is to be welcomed. However to say that ‘many fragile states are misgoverned and so making aid effective in such environments is demanding’ is to suggest that aid is primarily something that should be enacted via governments. There is in fact an alternative – in any conflict-affected society, there will be local grassroots groups working to prevent violence and build peace, often at the community level. Their ground-level work can be crucial in making peace sustainable and avoiding a relapse into conflict. And supporting them with greater funding avoids the problems of governance found at higher levels.

    Happily, the DFID paper itself (‘UK Aid: changing lives, delivering results’) seems to recognise this. The fact that it cites the work they will support in rural communities in DR Congo is very positive. Previous policies (not just from DFID), which focused much more on resolving issues at national government level, have failed to prevent ongoing violence in DRC, almost a decade on from the official end of the civil war.

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  16. Toby Quantrill

    Thanks for the very useful blog and comments.
    I agree with the caution of Paul Collier, and many others, with respect to restricting expenditure to the easily measurable. As Paul Spray notes, the importance of bringing poor producers into global markets is important and this needs to be done with a view to also increasing their power and influence in supply chains. As Fairtrade has learnt, supporting development of democratic smallholder organizations is a strong tool in achieving this, but is not likely to provide instant results. Tackling power imbalance in supply chains may also require looking at actions from the UK end as well. Again, not something that will fall easily into the short term ‘measurable impact’ catagory. Improving performance of small holder agriculture is increasingly understood as a route to reducing poverty and increasing food security, yet we remain unclear as to how DFID will be tackling this issue and indeed if there will be any clear strategy on agriculture.

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  17. Pierre Landell-Mills

    Paul Collier has rightly drawn attention to two major flaws in the UK’s approach to development aid: (i) the imbalance between increasing the amount of monetary aid that the UK aims to ‘deliver’ and decreasing DFID’s administrative budget; and (ii) the need to match DFID’s concern about poor governance/fragile states with convincing actions to prosecute those in the UK who have been involved in corruption and to do all we can to stop predatory political leaders and public officials from poor countries benefiting from the proceeds of corruption. Regarding (i), assisting poor countries to accelerate development is not only, or even primarily, a matter of transfering funds; it is also andmore importantly a question of ensuring that UK aid is used honestly, wisely and effectively. This requires a solid understanding of the local context through high quality political economy analysis, good technical expertise and building long term personal relationships with the key stakeholders. This in turn requires staff on the ground with a commitment to serve at least five years in each post. The high rate of DFID staff churn and the heavy reliance on costly consultants, as a consequence of capping and then reducing DFID staff, is extremely damaging to DFID’s effectiveness. Regarding (ii), the UK government should be ashamed of its delay in implementing the new Bribery Act and its failure to prosecute UK firms that have engaged in bribery to get contracts. How can we preach good governance to others if we fail to practice what we preach?

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  18. Chinedu

    To cut the long story short. You cannot be here and know what goes on in these countries. The following is harsh, maybe unworkable but possible with hands-on-deck:
    (1) Do not give money directly to these governments (in the developing and LDCs), they’ll spend it typically the way they do (loot) or on other irrelevant petty projects lacking maintenance. They spend their own (national wealth) on themselves and these things so what is a few million to them not to pocket it?
    (2) GIve the money to UK companies or other reputable companies (in EU or US) to carry out the work in these countries e.g. build schools, hospitals etc with local workers on-site to learn how to maintain if needed. (This could work because these companies can be held accountable here in the UK or other reputable countries in Europe or US.

    (3) You reduce poverty by empowerment (do not give me fish; teach me how to catch the fish). Education is key, only if the UK government can guarantee payment of at least 2% of well-trained teachers in these countries (without exonerating the duty of their own government to pay teachers), then we can ensure teachers stay in school to teach and not on strike or running a small business down the road to make ends meet.

    (4) Build factories (here again; UK companies should take charge), once built, there is an agreement to monitor it for quality and maintenance purpose and on-going training to tool-up people living there.

    (5) Set-up institutions to train people on modern agricultural techniques that would not require sophisticated technology (which they’ll end up depending on the west to supply = expensive). There are still semi-manual cheaper techniques that the west have the know-how on that they can teach these countries to boost their agricultural production (a sector they have comparative advantage in). Unfortunately, subsidies (EU & US) doesn’t help. But how did India, Brazil, China even manage in the face of these barriers? Why can’t e.g. African countries progress like their counterparts? Too much dependency while having vast natural resources? I just take it as BAD GOVERNANCE FULL STOP! so what may be done?

    (5) Train lawyers (who will uphold the law, demanding freedom, rule or law, human development, development = freedom (Amartyn Sen); train politicians who will understand what public service really is.

    (6) Brain drain – only if the receipient countries (west) can set up policy that would encourage these doctors, engineers etc who fled their motherland to return yearly for 3 months service or so to benefit their own countries, then development might be slowed. (David Cameron’s ICS = where under 22 can volunteer in a developing country doesn’t really cut it for me and wouldn’t work. It’s basically a gap year flimsy holiday programme for young people to get them off unemployment data I guess)

    Also if there can be a points system that can monitor movement of these intellectuals (doctors etc) and from the data, the government can increase Aid to the countries where these people have migrated from. Workable but can’t be bothered!

    Without intellectual ability i.e. smart people living and working in a particular country, development and poverty cannot be effectively tackled.

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  19. Chinedu

    I also forget to agree with Chris Jordan’s comment that helping developing or LDCs with their taxation or revenue system is critical to their development.

    However, even if the country ends up with the best tax system that collects revenue for national expenditure, it doesn’t stop corrupt governments/politicians from looting it dry. Therefore, it comes back to the point of training accountants and lawyers to know how to keep politicians & public servants in check.

    Freedom of the press to expose corrupt practices etc is in fact a great asset in policing this, unfortunately most African countries Nigeria included lack these things that make a good and prosperous society.

    Finally, microfinance for all its support may be an allusive panacea for development and poverty. Grants or subsidies look a better option since poor people do not mortgage their future or get into the abyss of debt. Yes, it may be open to abuse (since one may not be required to repay but with effective auditing and monitoring it can work; that is if their government’s got the money). Same abuse is now been reported in microfinance which in itself have now become a billion dollar industry. One day, we may see its own crisis unfold.

    In the end, teaching these countries how we run our own institutions (NOT BANKS SOrry lol) but government departments especially Revenue and Judiciary is very important in this unending quest in fighting poverty in Africa etc.

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  20. Alex Weir

    (17) Pierre Landell-Mills – good comments. To those of you commenting who know the (often deliberate) failings on donor and on recipient side, the only answer to development is to get pro-people clean uncorrupt presidents – and to remove them as soon as they become corrupt. This takes clean elections. Election Observor Missions as we all know are for various reasons ineffective. The only solution is Fraud Proof Voting Systems. This is 2011 – we can put man on the moon and missions to Mars but for some reason we cannot create Fraud Proof Elections?…. BS – there is no political will for this in either 3rd World Presidencies or in Western Governments. Why? Money. So it is up to us decent and concerned persons to upturn the tables of the money-changers. Bring on Fraud Proof Voting Systems. Everything will change. For the Better.

    Alex Weir, London and Harare

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  21. Kawalya

    I have something to say to Chinedu’s comment above;

    This is what takes place in many of these countries: The people have to incur the following problems on a daily basis.

    1.) Overheads in transporting goods and services (produce, passengers, expertise, etc )because of poor road networks leading to zero/minimal/negative profits, time delays, high fuel costs, insecurity, etc
    (This could be hard for you to comprehend if you have not lived outside the developed Europe and the States, but try to imagine a tubeless city, some dusty roads, roads with pot holes, old diesel engine cars giving off some fumes, etc )

    2.)Electrical power is only limited to a few areas in towns, very unreliable and too expensive in most cases: This means folks in villages and communities, who should have created jobs out there through innovation, by purchasing maybe small/medium millers, distillers, irrigators, manufacturing, etc cannot do it. I don’t know how health centers and their patients survive in cases of black outs!
    (Again this is also hard to imagine, but try to imagine driving through a street with no lights at night, and the only health insurance you have is the money on your account)

    3.)Water: this should be life, but unfortunately you see people in the cities carrying cans of water which means its not piped to its highest point of need: If piped to the villages, these folks would be able to buy irrigators, and carry on their farms all year round. Sanitation: folks still use pit latrines, some don’t even use them, and if you need a toilet you have to dig your own septic tank, if you don’t have toilet paper, try real paper, and if you don’t have that, you try plant leaves (well kind of green technology!)

    4.)The people do not seem to know that the above 3 are basic rights they should have: its only corruption, poor governance, embezzlement that is preached to them to the benefit of politicians and poor leaders.

    The list can go on and on, but i think the above are the basic ones and, if solved lead to innovation and investment opportunities.

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  22. david

    All these right on PC statements above, are really irritating. They all ignore the fact that it is money from the British tax take that is being spent on these Aid programmes. Well I for one do not like the idea of giving vast amounts of Aid money to countries that have an imbalance of wealth and opportunity. We have just had a pronouncement that pensioners will get a basic £150 a week, STARTING in 2015,and that pensioners will only get that amount if they reach whatever age of retirement on those dates. The rest of us will not get that amount even if we live that long. I paid taxes for over 50 years and now find that not only am I not going to get a pension increase now after paying in all that money but will not get an increase even in 2015. You go on about looking after the poor of this world well I can tell you that very few would give money away,our money, before making sure that the people of this country are treated reasonably as well. I could care not at all that the rest of the world are in poverty, I can assure you that looking at the salaries of Difd that the top ranks are not going to taste poverty either. Get real keep the money in Britain. Ask the “man in the street”

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  23. simon batterbury

    @ david
    I took your advice today and did go and ‘ask the man in the street’. And in a 96% Tory voting Englishtown at that. Rest assured the public i taked to are behind aid spending – I did get a few comment about people in Africa having too many children – some the usual uninformed opinions. The fact is, in terms of social justice, the argument that the Brits should spend all their tax on their own people alone, while people starve elsewhere, is highly suspect. Even the extreme right of British politics would have trouble with that one (helping out others being part of British culture). One reason for aid: remember colonialism and which countries were most implicated in it? Our debt to Africa in particular is historic.

    That said, we had a better way to assist poor people prior to 2002 in DfID. The quicker we return to actually assisting the poor, the better.

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