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DFID’s new aid strategy – the big silence

Tony Killick

Tony Killick

Tony Killick OBE is a past Director and senior researcher of ODI, now retired.  Much of his later work and publications were on aid policy issues

14 May 2014


Author Bio

Tony Killick OBE is a past Director and senior researcher of ODI, now retired.  Much of his later work and publications were on aid policy issues

Small scale fisheries in Africa - Chris Bene 2003 by worldfish

In the final leg of our development finance series we take a regional perspective. The world was once divided into donors and recipients, and those terms still have some meaning, despite the progressive rhetoric. But countries and regions are proving increasingly difficult to label as one or the other. Many countries, including some of the very poorest, now contribute to – as well as being the target for – regional and global development objectives. And public funds are reducing in quantitative relevance around the world, as ODI's Age of Choice series is showing, even though their qualitative importance remains.

So in this final group of blogs, we have asked experts from around the world to reflect on their country and/or region, either as a contributor to global development finance, or recipient, or both. What are the key factors that make this moment, as we approach the 2015 deadline for the achievement of the Millennium Development Goals, so different to previous development eras? What needs to be done most urgently to support development objectives? We hope you enjoy reading these diverse perspectives, and please do engage in the debate in the comments section.

In this first blog, Tony Killick OBE takes a look at how development policy in the UK has transformed over the past few years, from a focus on 'MDG type concerns' to a policy driven by the pursuit of growth. He argues that there should be a stronger public and intellectual discussion of this transformation, and poses a series of questions that he believes should be asked of DFID.

Jonathan Glennie, series curator.

Nearly a decade ago I wrote an article on the history of British aid to Africa and was recently asked to provide an up-date.  Having been away from the debates and literature for some years, I was surprised to learn that since early-2013 DFID appears to have been implementing a major shift in UK aid policy that no-one seems to be talking about.

This blog aims to draw attention to this rather odd silence in the hope of stimulating debate about some of the issues arising from this policy shift.

The main contention of my original article back in 2005 was that policy-makers had been free to set aid policies in general and for towards Africa in particular without much external influence. Is this still the case? 

The period covered by my recent update (to be published in the forthcoming volume Readings in the International Relations of Africa, edited by Tom Young, published by Indiana University Press) straddles a Labour government and a few years of the Conservative-LibDem coalition, from May 2010, that has seen two Secretaries of State: Andrew Mitchell until September 2012, and Justine Greening.

Mitchell’s tenure displayed continuity with the policies of his predecessors and he went on record to say ‘there is not a Conservative, Liberal-Democratic or Labour development policy but a British one’. His chief innovation, driven by a commitment to demonstrate value for money, was to strengthen the results orientation of his department and the independent scrutiny of its performance. A Results Framework was created to measure aspirations against actual results, alongside an Independent Commission for Aid Impact to provide an external view. But the previous administration’s policies, including an emphasis on poverty reduction and the Millennium Development Goals, remained largely untouched.

While it is too soon to assess her actual impact, Justine Greening brought a marked change of approach. Clearly anxious to make her mark, within a few months of taking over she delivered a speech that signalled a major policy change: ’ramping up the focus on DFID helping to drive economic growth.'

A year later, another speech went into more detail. ‘Economic development’ was now to be a core priority – a ‘fundamentally smarter’ approach to aid, in which ‘development’ was clearly equated with economic growth, albeit inclusive, labour-intensive growth.

Between these two speeches, she asserted, DFID had been on a ‘transformational journey’ involving ‘a radical shift in the way that DFID works.’ The welfare-oriented approach remained important but was not enough and DFID was adopting a ‘frontier economy strategy.’ Growth, she argued, was the best long-term solution to poverty, and helping to develop the next generation of rapidly-growing economies would be good for British trade and finance.

The amount of bilateral aid for ‘economic development’ was to be more than doubled to £1.8 billion between 2012/13 and 2015/16. And DFID’s new strategic framework set out the case for this new emphasis on growth. What this shift might mean for Africa was not spelled out and it was not clear whether Africa would benefit from a ‘frontier economy strategy’, although the strategy paper confirmed that DFID would still focus on its chosen countries of concentration.

It seemed, then, that a new minister had shaken up the previous cross-party consensus – a radical shift that might have been expected to stir controversy, given the reassertion of the use of aid to promote British interests. But it just hasn’t happened. A year after Greening’s 2013 speech the Labour opposition has been silent. There has been no Parliamentary debate on this policy change and the House of Commons Committee on International Development has been mute. Even the usually vocal international NGOs have been quiet. In short, policy autonomy has reigned supreme. The minister’s ‘transformational journey’ seems to have gone unnoticed, with unpredictable consequences for Britain’s aid to Africa.

It is not my aim to criticise this policy shift; I am agnostic about it and think the strategy paper makes out an eloquent case. My concern is that this ‘transformation’ of Britain’s aid stance – from one focused on MDG-type concerns to one driven by the pursuit of growth – deserves thorough public and intellectual scrutiny.  Here are some of the questions that deserve discussion:

  • How effective is aid in stimulating growth? There is, of course, a wealth of literature on this but it hasn’t arrived at any agreed conclusion. Is there not some serious doubt about the growth efficacy of past aid?

  • Relatedly, the strategy envisages that the desired growth will be driven by the private sector. But how effective is aid likely to be in promoting the private sector? Does it have a track record in the effective promotion of institution-building? Can it induce the right kinds of infrastructural investment and will this make a crucial difference to private sector growth?

  • It’s relatively easy to introduce new approaches when DFID’s budget is expanding as it has been. But what happens when budget stringency kicks in and hard choices can no longer be avoided? What happen then to the balance between direct poverty reduction and growth promotion?

  • Given Treasury reluctance to increase staffing levels, even where there is a growing budget, has the relocation of DFID’s expertise to the promotion of ‘development’ been at the expense of other aid programmes?

  • The terms ‘inclusive’ and ‘job-creating’ trip easily off the tongue when DFID describes the type of growth-path it wants. But this desire is nothing new; it used to be called ‘redistribution with growth’. Can foreign aid really deliver it? How does the new approach deal with recipient country political-economy issues around the distribution of the benefits of growth?  Remember DFID’s sadly abandoned ‘drivers of change’ initiative?

  • How consistent is DFID’s new approach with the selection of its 28 countries of concentration, chosen for their poverty, morbidity and insecurity? They are not the most obvious candidates for DFID’s new ‘frontier economy strategy’. And how consistent is it with DFID’s stated desire also to ‘re-emphasise the importance of the Commonwealth’?

  • What are the implications for the regional distribution of the UK’s aid, and its allocation between poor and less poor countries?

  • What are the implications of DFID’s change of tack for cooperation with other bilateral donors, for its voice within the World Bank and other multilateral organisations, and for the determination of the post-MDG agenda? 

  • What are its implications for the terms of aid and for the choice of aid modalities?

No doubt there are other important issues too. On the question of the terms of aid, here, at least, there has been some debate. The House of Commons International Development Committee recently suggested that DFID should revert to loan finance for some of its assistance and ODI researchers have broached this topic, but this is only one among many of the issues that need debate. 

There’s plenty to talk about. Why is everyone so quiet? ODI should take the initiative and organise the greater scrutiny that the new policy deserves.