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The Aid Debate

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Philip Stevens: Aid alone will not help [Nov. 17th, 2009|11:00 am]
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Despite record levels of foreign aid for health, almost no progress is being made in improving child mortality in the poorest parts of sub-Saharan Africa. Many countries are going backwards.

This is not surprising. The UN and British government – egged on by NGOs and activists – has bet the house on the daft idea that if western governments transfer enough money to governments in poor countries, health systems will magically improve and medicines will get to sick kids.

As far as strategies go, this is a turkey.

Once it makes it to the recipient government, what happens to that money is anyone’s guess. There is almost no data on how aid money makes its way through recipient health systems.

We do know, however, that much of it is lost to corruption – from ministers skimming off their share of grants, to local health workers charging patients for nominally “free” services.

Then the Western consultants and NGOs need to take their cut: how else can they afford the fabled white Land Cruisers that infest African cities?

When some aid money does make it to local clinics, World Bank research shows it is most often the educated, urban classes who benefits, rather than the rural poor for whom it is really intended.

To cap it all, the influence of Western NGOs on donors has also meant that “fashionable” diseases such as HIV get the lion’s share of funding, to the detriment of less high profile problems such as pneumonia, which kill many, many more.

And when the data comes in showing that this spending inevitably has made no impact on disease, NGOs use it as justification to lobby for yet more aid. And so the depressing circle continues.

In the short-term, donors could spend taxpayer’s money more wisely by bypassing governments altogether, instead putting health services out to competitive tendering amongst the voluntary or private sectors. Where this has been tried, for instance in Cambodia, the results have been startling.

In the long term, though, we can’t hope to improve child mortality by simply beefing up aid. There is no way western aid agencies can fund a clean water supply, health services and a decent daily meal for every child in Africa. Even if such a thing were logistically possible, such large inflows of hard foreign currency would wreak havoc on fragile local economies.

In the end, the only way to solve child mortality is by fostering economic growth. Before the Industrial Revolution, Britain’s children also died in droves. But the wealth generated by economic growth allowed us to clean up the water supply, move to clean fuels, improve diet and universalise vaccination– a story repeated in every developed country, and now in places like China, India and Brazil.

The economist Peter Bauer famously described foreign aid as “an excellent method for transferring money from poor people in rich countries to rich people in poor countries.”

While the intention of those who call for an increase in aid is undoubtedly noble, there is simply no logic in sticking to a strategy that is so manifestly at odds with reality.




Philip Stevens is a Senior Fellow at the International Policy Network. He is an expert on global health policy, and has written widely on AIDS, malaria, health systems, pharmaceutical innovation and counterfeit medicines. Philip has also held research positions at the Adam Smith Institute and Reform in London, and spent several years as a management consultant. He holds degrees from the London School of Economics and Durham University.
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Comments:
From: southasian
2009-11-18 09:47 pm (UTC)

Where Does Aid Go

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You have asked specifically about what happens to aid intended for health. A recent essay in the Wilson Quarterly (Pakistan Picaresque) by Dr. Samia Altaf provides one answer. Dr. Altaf was the 2008-2009 Pakistan Scholar at the Wilson Center preparing a manuscript on the effectiveness of aid to the health sector in Pakistan. The manuscript has been accepted for publication by the Wilson Center Press. The essay is one of the chapters from the book.

http://www.wilsoncenter.org/index.cfm?fuseaction=wq.essay&essay_id=363029

An essay on whether Pakistan should get more foreign aid is available here:

http://thesouthasianidea.wordpress.com/2008/09/07/should-pakistan-receive-more-foreign-aid/