The bilateral aid review (covering UK aid to poor countries, as opposed to multilateral aid, which is the UK's contribution to international initiatives) comes at a difficult time. Before the financial crisis, support for aid was at a high in Britain, following the high-profile Make Poverty History campaign in 2005, which saw the Conservative party committing to the 0.7% target.
But what was initially a vote-winner, part of the rebranding of the Tory image away from the "nasty" party of British politics, has become a potential vote-loser. In an age of austerity at home and deep changes abroad, where countries we used to regard as in need of help now have growth rates and foreign currency reserves Britain looks at with envy, the Tory development project finds itself in an odd position. It has to defend aid to a sceptical public, cheer-led by the right wing in the Conservative party – the only serious opponents to the 0.7% consensus in parliament.
Little wonder, then, that this review is full of language to mollify critics of aid – who put the emphasis on results and value for money. It lacks reference to the issues that more seasoned observers will be looking out for, such as an emphasis on developing country-led development strategies and donor harmonisation.
Having said that, the two fundamental pillars of this review are sound, and possibly exciting: a reduction in the geographical scope of DfID's ambition, and a new way of allocating aid according to a projection of concrete and costed results.
Reduced number of countries
The crucial news is that the number of countries DfID will focus on falls over the next four years by a third – from 43 to 27. This has been extensively trailed so may not seem surprising. But in a context of rising aid expenditure (set to increase by $4bn by 2015) one might have expected the scope of the aid programme to expand to cover more countries. When Spain increased aid a few years ago, it opened more country programmes, and the Australians may do the same when their aid review ends shortly.
But the development secretary, Andrew Mitchell, has opted to reduce the number of key country programmes, and this is a good decision. Much depends on a thorough understanding of the country context to make aid work. Spending money in fewer countries makes it more likely it will have a positive impact. With pressure on DfID "administration costs" threatening to reduce the number of professional staff overseeing the aid spend, a reduced cohort of recipient countries is a welcome rebalancing.
The reduction, particularly the much-touted shutting of the Russia and China offices, is being sold as a distinctive policy of this government. It is, in fact, a continuation of the trend adopted by DfID when it began its exit from south and central America some years ago. And the decision to exit from Russia and China was taken by Labour in 2007.
Criteria – how were the decisions made
The decisions about which countries to leave and where to continue aid were based on an assessment of a) development need, b) likely effectiveness of assistance, and c) strategic fit with UK government priorities. The first two elements were analysed using a need-effectiveness index devised for the multilateral aid review. The third element is not discussed in detail, but we are told the UK Strategic Defence and Security Review's stipulation that 30% of DfID funds go to fragile and conflict-affected states has been met. "Winners" from the review include Pakistan, Yemen, Somalia, Afghanistan and the Occupied Palestinian Territories, all important for security as well as development reasons.
While the need component looks at the number of poor people, human development index score and a measure of the country's fragility, the effectiveness part only has one component, the World Bank's controversial country policy and institutional assessment score. There is also a contradiction when it comes to a focus on fragile states. The needs part of the index ensures fragile states are favoured for DfID cash, while the effectiveness part favours states with strong institutions (ie non-fragile), which "balances out the fragility part of the need index somewhat", as a note to the review acknowledges. So is there a focus on fragility or not?
Broadly speaking, the countries that retain DfID programmes are the ones that do well on the need-effectiveness index, which India comes top in (mostly because it is so big). There are six countries that score less well on the index but which retain a DfID programme (Kyrgyzstan, the occupied territories, Somalia, South Africa, Tajikistan and Zimbabwe).
Ultimately, the decision of where to keep working is less important in developmental terms than the overall decision to reduce the number of programmes. The reality is that almost all the poor countries of the world would benefit from a well-run DfID programme. The index does seem a fairly weak basis for judging where aid will be effective and slightly better at assessing where aid is needed, but the qualitative assessments and discussions with country experts will have been crucial. Further details on the individual decisions will be published in April and will be read with interest.
From top-down to bottom-up?
This government has already shown that it likes to present everything as if it is a brand new approach to development. In their foreword, David Cameron and Nick Clegg emphasise a focus on "real evidence" of progress rather than "sending money off in the hope it will do some good", which is presumably what was happening before they came to power. While this has obvious party political motivations, it may irk more than just the Labour party and DfID staff who thought they had been carrying out profound impact assessments for many years.
Nevertheless, one genuine innovation is presented in this aid review. Whereas previously country programmes would be allocated money and then come up with a strategy to spend it, now they have to apply to head office for funds to achieve specific projected results – what is called a "results offer".
This implies a genuine shift in culture, probably in a good way. A narrow "value-for-money" focus does present dangers, but ultimately results for poor people are all that matters in development. So an unrelenting focus on results is welcome, as long as that doesn't mean short-term deliverables at the expense of long-term sustainable change, and as long as value for money does not mean risk-taking will be penalised.
Time will tell if these changes really constitute a "new approach to development". The danger is that while it is sold as bottom-up, the impact could be the opposite. Since 2003 a huge international initiative to improve aid's impacts has been developing, known as the Paris Agenda for Aid Effectiveness. Apart from "managing for results", the declaration, signed by all OECD donors and most aid recipients, emphasises the need for donors to co-ordinate their aid around recipient country-led priorities.
The idea is that recipient countries take the lead in developing their anti-poverty strategies, and donor governments gather to support them. It's called "country ownership". There is literally no mention of these terms in the aid review, let alone support for the Paris process.
It is worth mentioning that there is no discussion of aid conditionality or aid dependency, perhaps the two most important impacts of aid as most of these countries enter their fourth or fifth decade as aid recipients. When will the aid industry begin to address these issues with the seriousness they deserve?
By continuing the push for more focus and results, this review will make easier the task of defending the UK's support for international development to an increasingly sceptical public. But it does nothing to quell concerns over the tension between enhancing development effectiveness and gaining public trust.
At some point, it may be necessary to engage in communicating the complex reality of development to the British public. It is a shame, then, that, according to what I have been told, the development education budget has been cut.
An extended version of this analysis can be found on the Overseas Development Institute's site
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