09 February 2010

Should the 0.7% be embedded in law?

A draft International Development Bill embedding in law the target of achieving aid levels equivalent to 0.7% of gross national income (GNI) by 2013 is working its way through the UK Parliament. I recently submitted evidence to the Select Committee on International Development about the Bill. My comments were framed by the question: will this legislation do any harm?

I organized my comments around the implicit assumptions in the draft Bill. I also noted the potential conflict of interest as IDS receives approximately 50% of its funding from DFID contracts and grants.

Implicit assumptions in the Bill

1. More aid is good for development.

This is a good bet if

a. aid allocations are driven by a donor-recipient consensus on the evidence about what stimulates development in that context and if both donor and recipient have the capacity to utilize the overseas development aid (ODA)

b. as aid allocations increase they are more carefully monitored and assessed.

c. as aid is increased, it does not distract attention from aid exit strategies in certain countries

2. More aid from the UK is good for development.

a. Leadership is important for inspiring others to increase commitments, but free-riding is all too easy and I would like to see some evidence on whether unilateral increases in aid are merely compensated for by reductions of other Development Assistance Committee members

b. Does DFID have the capacity to sensibly administer more aid under these tight deadlines? If it took 11 years to increase the ODA/GNI % by 0.17 percentage points, an increase of 0.27 percentage points over 5 years represents a three-fold increase in ramp up. Can this be done in increasingly fragile contexts with a smaller and smaller staff?

3. UK aid will be more predictable.

a. The previous point emphasizes how quickly ODA will have to increase if the target is to be met. Does this make UK Aid more predictable?

b. If ODA is strictly tied to GNI does this mean ODA amounts become less predictable?

4. Without the Bill, 0.7% will not be protected. With it, it will.

a. Cross-party support for 0.7% seems strong although some have concerns about DFID funds being allocated to climate and military purposes should there be a new Conservative Government.

b. There seem to be several get out clauses that an SoS can appeal to if the target is not met (“the effect of economic or fiscal circumstances arising outside the UK” which seems to offer wide latitude)

5. The UK public is comfortable with the 0.7% by 2013 goal.

a. Will this Bill, and the reporting on any failure to meet the target, strengthen or erode the UK consensus? I can see several newspapers using the Bill and any subsequent failure to meet it to “wake up” its readers about “money being given to corrupt African governments”. This will need to be managed and DFID’s communication strategy around ODA will have to be substantially strengthened (see a recent IDS report by Spencer Henson and Johanna Lindstrom on this).

b. The timing could be seen as electioneering. If so, this could contribute to the politicization of aid in the UK. If the current Government is re-elected, does the Bill add much? If an Opposition party is elected, any failure on their part to support it could undermine the UK’s credibility going forward.

On balance, I am in favour of the Bill. But the Impact Assessment section of the Draft Bill seems rather sanguine about the potential downside risks--these will need active management.

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