Over 30 years, extreme poverty has fallen from one in two to one in five in the developing world. Evidence shows that international trade rather than overseas aid has achieved this.
However, the UK’s aid budget has increased by nearly 4x in real terms since the late 90s. The 0.7% target has been accompanied by ‘rushed spending’ and ineffective distribution of aid.
Only five other countries hit the UN’s 0.7% target for aid spending. On average, these countries ran a 2015 budget surplus while the UK’s deficit was 4.4% of GDP.
Problems persist with aid efficacy, particularly with multilateral bodies. UK contributes to around 1/7 of the European Commission’s aid disbursements, yet has relatively little influence. UK paid £7.4 billion to the EC aid budget over 6 years.
Brexit means the UK can take back control of aid money given to the EC. But this may mean more waste. DfiD’s bilateral budget would grow by 18% in one year.
Now is the time to review the wisdom of the 0.7% aid target.
Daniel Mahoney & Tim Knox - Thursday 19th January 2017
Daniel joined the Centre for Policy Studies as Head of Economic Research in November 2015. He was promoted to Deputy Director in March 2017. Prior to joining the CPS, he worked in research roles for a number of parliamentarians.
Before his appointment as Director of the Centre for Policy Studies, Tim Knox was the Editor at the CPS - a position in which he was responsible for publishing papers by every Conservative leader since Mrs Thatcher as well as by hundreds of leading academics and opinion formers.