Don’t Give Up On Aid Just Yet

Headlines on aid and global development are grim right now. The decimation of USAID has been swiftly followed by major cuts announced in the UK, and smaller cuts planned from a raft of European donors. Many of these aid cuts will lead to people dying. CGD Non-Resident Fellow Ken Opalo writes “this is the end of the aid paradigm.” Our friends at ODI are running a project on a “Post-Aid World”. I don’t think we should give up so easily.

First, whilst the cuts are widespread, we needn’t assume that they are permanent. Foreign aid has fluctuated over the years. In real terms, the current cuts take us back to where we were a decade ago. The world is still spending billions of dollars in foreign aid. While the US and UK will play a much smaller role, their falling contributions have been replaced by new contributions from other donors.

Trends and projections in aggregate foreign aid, 2016 - 2027

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Data: OECD CRS and analysis of government statements by Robin Davies. Europe includes Austria, Belgium, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, and Switzerland. “Other OECD” includes Australia, Canada, Japan, Korea, and New Zealand.

That these cuts are not unprecedented does not reduce how concerning they are. There is still a mammoth financing gap–the UN estimates on the order of $4,000 billion per year or 20x total global foreign aid. We should also be concerned with the quality of aid as well as the quantity. And it’s true that aid is now less well-targeted at extreme poverty and more self-interested. But again we needn’t assume that this change is permanent.

Foreign assistance remains broadly popular among many of the public. The Development Engagement Lab (DEL) at the University of Birmingham conduct regular surveys which show that whilst support for foreign aid is down, half of the public in the US, Britain, France, and Germany, still think that we should either keep or increase the current aid budget.

Half the public in rich countries think we should keep or increase the current aid budget

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Data: Development Engagement Lab

It’s not just the Development Engagement Lab. Other surveys by Pew and YouGov have found similar results in recent weeks—that around half of Americans support foreign aid.

What about opinions in the receiving countries? The World Values Survey asks people in countries around the world a set of consistent questions. These include confidence in charitable and humanitarian organizations in general, as well as confidence around specific aid organisations in particular, for example the World Bank and UN. Across all of these questions, people in poorer countries have more confidence in aid agencies than people in rich countries.

Confidence in charitable and humanitarian organizations is higher in poorer countries

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Data: World Values Survey, Wave 7 (2017-2022)

Most people in rich countries are not selfish. They do care about poverty and think we should do something to help. But we haven’t done a good enough job of showing people how effective aid can be. In all four countries surveyed by DEL (US, UK, France, Germany), less than a third of people think that development aid is effective—far fewer than say they are concerned about poverty and think we should give aid.

It’s not just that people in rich countries think aid doesn’t work. Most also think that the world is getting worse. This is another big misconception. Whilst living standards might be somewhat stagnant in rich countries, globally things are getting better for most people. Aid plays a small role in the success of global development, but the facts are that most people are living longer, healthier, happier, lives, and that the tiny amount of money we spend on foreign aid is doing some good.

For all its flaws, foreign aid is usually effective. We need to do a better job at making the case.