Thursday 19 Jul 2018 | 19:53 | SYDNEY
Thursday 19 Jul 2018 | 19:53 | SYDNEY

What is the rationale for foreign aid?


Hugh White

22 July 2011 12:11

Well, many thanks to Annmaree for her response to my op-ed. Over the years, she's taught me a fair bit of what little I know about aid, so I take her views very seriously. 

But I'm not sure her points quite settle my concerns about the underlying rationale for our aid program. (Another interesting post responding to my op-ed by Terence Wood over at Devpolicy raises some similar questions). 

Just to reassure: I'm not 'anti-aid'. But I do think that we should be clear about what the aid program is trying to achieve, and I think both the Aid Review and the Government's response have left that very muddled. Both say that the primary purpose of Australia's aid is to 'overcome poverty'. Is that something aid can do?

I think it is pretty clear that the only way to overcome poverty is to grow economies. So they key question becomes whether aid can do much to help economies grow.

What strikes me is how reluctant aid advocates are to claim that it can. Annmaree's post leaves me a little unsure of her view, because to my eye none of the three examples she offers of what aid can do seem to show that it does much to support growth. 

Her first example, the Millennium Development Goals, are a mixed bag. Some relate to eliminating poverty, and some to ameliorating its consequences. Many are being achieved, but Annmaree doesn't say whether the ones relating to poverty elimination are being achieved, in part or in whole, as a result of aid. 

Her second and third examples both relate to health care. I'm sure the programs she mentions are very successful in helping improve health. But that is not the same as overcoming poverty by fostering economic growth. 

So where is the evidence that aid can achieve the Government's declared objective for the aid program? Or, are we to conclude instead that the 'real' outcomes of the aid program are quite different from its declared objective? Rather than overcoming poverty, it is really just about ameliorating its effects.

I think it's a bit of a worry that the Government can commission, receive and accept a Review of Aid Effectiveness without resolving a deep muddle about core objectives. I do not see how we can begin to explain why the aid program should quadruple in a decade when we can't be clear what it's trying to do. 

Photo by Flickr user isafmedia.