The Wheel Has Turned: UK Aid Policy

The UK’s Department for International Development (DFID) published the results of its Multilateral Aid Review and Bilateral Aid Review today. The reviews had been ongoing more or less since the coalition government took office last May, and the results were much-anticipated, and not without anxiety. The government had long ago ring-fenced the aid budgeted and was committed to increasing it, so the anti-aid brigade knew they had little to hope for in today’s announcement. Many supporters of aid meanwhile were anxious that too much aid would be linked to the UK’s military adventures in Afghanistan, Pakistan and Iraq, and taken away from other parts of the world less linked to the UK’s security in this era of international terrorism. Others were of course worried that their particular perspective or interest would be ignored or dropped. But overall, I’d say that most people will admit, whatever their fears and particular interests, that the government has done a fairly good job in trying to make a bit more sense out of its large, complex and unwieldy aid programme.

At the heart of all this has to be a recognition that the aid wheel has turned. For over a decade since DFID was established in 1997 by Clare Short, it had been subjected to little really rigorous scrutiny at the fundamental level, for a number of reasons. Because the moral case for aid was and remains strong, it was easy to label those asking difficult questions as heartless. Meanwhile, the aid enterprise was so vaguely and broadly defined, and was in any case clearly a long-term endeavour whose outcomes ought not to be measured too soon, that it was by nature difficult to know what success looked like, and thus how to hold its institutions accountable. In this respect it was almost a faith-based enterprise, undertaken and supported by people and institutions whose faith in its importance was sufficient to maintain their energy and commitment. In any case, most aid experts were in one way or other part of and party to the system, so why scrutinise it too closely?, especially when anti-aid critics might seize upon any criticism to propose cuts or abolition. Finally, when the economy was doing pretty well, most people were happy for a relatively small proportion of GDP to be spent on the welfare of poor people elsewhere; in fact for most people in the UK, DFID was fairly invisible. This phenomenon was not limited to the UK, but applied to other OECD countries too.

But the economy took a turn for the worse, the offices of government changed hands, in the UK as elsewhere, and it was time to shine a brighter light on the institutions of aid. In the UK the new government to its credit committed itself straight away to maintaining a large and growing aid programme, despite the views of many – perhaps most – taxpayers who were concerned that the budgets of other government departments were being cut while aid kept growing.  Instead of cutting, the government would review and revise the aid programme to be less focused on process and more on results, and ensure that its contribution to UK security and prosperity were maximised. DFID’s spending is more or less divisible into two main instruments of roughly the same size: bilateral aid, targeting specific countries; and multilateral aid, supplying funds to the UN and other multilateral agencies. Hence, the two reviews whose results were announced today: the Multilateral Aid Review (MAR) and Bilateral Aid Review (BAR).

The BAR will cut the number of core bilateral aid partners from 43 down to 27 over the next four years (though it may actually be 28, as Sudan is due to split into two countries come July this year). China and Russia are out, along with other nations deemed no longer in need of UK aid such as Serbia and Vietnam; and other nations where the UK was deemed to lack a comparative advantage, like Burundi. Of the countries the UK will continue to support, a significant number are “fragile” or conflict-affected, in recognition of the “double whammy” faced by citizens there, and the extra support they need. In all 27 countries, DFID’s focus will be on a broad and comprehensive set of results, loosely grouped under five headings:

• Wealth Creation
• Delivery of the Millennium Development Goals to improve health, education, water and sanitation, and reduce vulnerability, hunger and poverty
• Governance and security
• Climate Change adaptation and mitigation
• Humanitarian assistance.

The result of the MAR – a rapid and complex assessment of 43 multilateral recipients of UK aid money – is that four agencies are being dropped, because their mission fails to overlap sufficiently with DFID’s goals and/or their performance fails to come up to scratch. These are UN-Habitat, the International Labour Organisation, the UN International Strategy for Disaster Reduction and the UN Industrial Development Organisation. Some other recipients were put on notice that their funds may also dry up if they fail to improve.

Both the BAR and the MAR have been conducted with the degree of professionalism and excellence we have learned to expect from DFID over the years. And with a good degree of transparency too. Despite the speed with which the reviews were done, the resulting reports clearly demonstrate a reflective approach and a recognisable methodology for decision-making.

How should we judge the results of this fast-paced, politically driven policy review? On the whole, it seems a pretty welcome wake-up call. Taxpayers’ money is being spent in large amounts, and should be subject to rigorous accountability. Those who feared that the new government would flex its muscles just to show that it meant business have been reassured that the process has been undertaken without such cynicism. Certainly there will be people and organisations, and especially in the countries and organisations which will no longer benefit from UK aid, who have cause to complain.  Personally I am very disappointed that Burundi is being dropped, since it’s something of a donor orphan and needs plenty of help to recover from decades of conflict. But decisions do have to be made after all, and there will always be winners and losers. On the whole, there is plenty to welcome about the BAR:

• The decision to focus on fewer places makes complete sense. Development aid is labour-intensive work, especially in complex, fragile or conflict-affected environments. Civil service numbers seem to be going down, even in DFID whose budget is going up. So it makes excellent sense to focus its efforts on fewer places where its efforts can be planned, executed and monitored with care, and adapted on a regular basis as needed.
• Fragile and conflict-affected contexts do need special attention: they are the places where rapid progress is hardest to achieve, and where people live with the least hope of improvement.
• From the documents that were released today, DFID has done a pretty good job of squaring the circle between the need to deliver on a set of concrete results which look, sound and feel good to a sceptical electorate, and the need to tailor its support to the specificities of each context. This means tangible headlines like 11 million children in school, and saving the lives of 50,000 women in pregnancy and childbirth, and 250,000 newborn babies; alongside less concrete but, in the scheme of things, equally important issues like “turning the police into an accountable, community based service” in the Democratic Republic of Congo (DRC), “promoting stability and strengthening accountability” in Kenya, and “increasing the ability of citizens to hold [their government] to account” in Sierra Leone. Getting this balance right is tremendously important, so that the aid programme does not get hijacked by the need to support only those programmes which are concrete and easy to measure. Development progress is more complex than that.
• The attention to fragile states does not appear to have tipped too far towards AfPak and other areas of current or recent UK military operation. The aid programme in Iraq will be phased out, since Iraqis are considered to have sufficient resources of their own, especially from oil.
• Countries which have not made the cut are not just being dropped, but will be phased out over a few years, and the UK will respect commitments already made.
• The bilateral programmes will be complemented by regional programming, able to focus on cross-border or regional issues, such as trade. This is particularly welcome for conflict-affected regions, where conflicts all-too-easily cross borders, and thus peacebuilding efforts need to do so, too. In this respect for example, the UK’s continued and enhaced support for conflict-sensitive and confidence-building economic cooperation across borders in Africa can make a big difference.

So as far as the BAR goes, DFID appears to have done a creditable job and what’s important now is to ensure that the platform it has thus established from which to build on and improve its work in 27 countries over the next few years is exploited with as much care as necessary, especially in the fragile contexts. DFID is helping to lead the ongoing International Dialogue on Peacebuilding and Statebuilding, in which a number of donor and recipient countries, along with multilateral organisations, are trying to figure out how international cooperation, including aid, can help build peaceful societies and effective states. It is not easy and the answers are not yet clear, so DFID just like others will need to adopt a patient and adaptable approach if it is to achieve its aims in this respect. Support to Peacebuilding and Statebuilding should no more be immune from scrutiny and accountability than any other aspect of aid; but nor should we pretend that it can be reduced to a set of one-size-fits-all results as some might like. And nor should the UK’s support to fragile and conflict-affected societies be limited to “aid” in its classic sense. A subtle approach, tailored to the context and based on a sophisticated analysis of the political economy and its potential to adapt and transform, will be needed; and DFID will need to ensure that its staff in each context, as well as those who support them in London, are well versed in the skills and talents to do this, and are held accountable for it. There will be times when, even in this new results-based era, the planned programme and some of the expected results will have to be set on one side because other issues become more important.  

DFID and its sister UK agencies are not there yet, in terms of their ability to act in this politically astute way, but they are trying and can get there with the right political leadership. But this is the very area where the multilateral agencies have been found wanting. The MAR is a very impressive document, applying a clever combination of simplicity and sophistication as one must when measuring such a wide and diverse array of agencies as UNICEF, UNHCR, UNESCO, the EC, the World Bank and the Red Cross and Red Crescent. My gut feeling is that the MAR is harder to defend than that of the BAR, mainly because the task was a much harder one based on less solid conceptual foundations. If DFID’s budget is increasing, even while its staff complement goes down, and it commits to spend at least 30% of its funds in fragile contexts where – by definition – the institutional capacity is limited, it has no choice but to work through the multilateral agencies who operate in such places. Four agencies are being dropped, and a few others given fair warning they need to up their game. Fine, but 39 (90%) are being retained. Is this a fair reflecton of their worth? Are all 39 agencies good enough?

The report found that, setting humanitarian agencies apart (since they would after all be expected to understand how to operate in fragile contexts) not a single organisation was considered “strong” at operating in fragile contexts. While 14 were rated “satisfactory”, 15 were “weak”, and 4 “unsatisfactory”. Almost all of the multilateral development banks and private sector development organisations were weak or unsatisfactory at operating in such contexts, which speaks volumes about the challenge of meeting economic recovery needs in the places they are most needed – and where the political economy is often at its most complex and resistant to change. As DFID says, “all the multilateral banks are actively engaged in fragile states, and often play a significant role….[and they] generally have good policies and guidance on working in fragile states …[but] lack adequate in-country capacity”.

The review also found multilaterals in general to be poor at incorporating gender. This is very worrying indeed on its own account, but also because an inability to apply a gender lens is likely to be a symptom of a more fundamental inability to understand the complexity of the societies in which mutilateral agencies work, and which they aim to help transform. And this is made worse by the poor scores they received for transparency and accountability which are likewise key to successful performance.

As the MAR very clearly says, the world needs effective multilaterals, which potentially have the legitimacy and the scope and reach which individual donors like DFID can’t aspire to. But too many of them have become unresponsive, too often taking on the characteristics of monopolies. Too often they are held accountable for the wrong processes and the wrong set of outcomes. Working in fragile contexts needs decentralised organisations, able to adapt and react to the context. Too few of the multilaterals are able to do this yet.

So I welcome the MAR as the first step in a process in which the UK, along with other like-minded Member States and funders, pays far more attention to shaping the ability of the institutions it supports and helps lead, to operate more politically and more sensitively in complex political economies, with a view to improving not only the economic and social indicators as measured by GDP and the Human Development Index, but also the much-harder-to achieve-and-measure outcomes such as better and more responsive and participatory relations between citizen and state.