It is very hard to say, definitely and unambiguously, how much value we get from aid and impossible to reduce the issue to simple metrics. The impact of spending on our own public services is difficult enough to measure.
Abstracting further, to consider whether our support helps improve another country’s public services, across the dozens of countries that UK Aid reaches is clearly a complex question. Given the uncertainties, it’s understandable that many people respond with a large dose of cynicism. The tragedy is that the benefits of aid, though complex and variable, are huge.
As John Rawls showed fifty years ago, under a ‘veil of ignorance’ of what our actual standing is in the world, we would all seek greater equality. If your situation was determined by a roll of the dice, wouldn’t you prefer to have a chance of a decent life, no matter where you ended up? According to the World Bank, almost half (44 percent) of the world’s population lives in poverty, on less than $5.50 a day . How do you like those odds?
The world is highly unequal. The average person in the UK earns 20 times more than the average person in even a middle-income country like India, let alone the least well off. That inequality is continually growing, in large part because wealth begets more wealth, so unless there is a release valve rich countries will suck the rest of the world dry. Indeed, in his landmark work, Thomas Piketty shows that never before has wealth been so unequally distributed as it is now, except on the eve of the Great War.
Think for a moment about how economic growth happens, as a function of the labour, capital and ‘total factor productivity’ (TFP), the sum of technology, patents, knowledge, etc. Everyone has their labour, but you cannot do much without capital. Who owns this? The rich countries. In order to borrow it, developing countries must pay a high rate of interest, much higher than in the West because of the ‘risk premium’ imposed. This transfers much of any return straight back out of the country. And firms and countries jealously guard TFP, calling it ‘intellectual property’. Knowledge like this is a ‘non-rival’ good – one person using it does not reduce the amount available to others. In economic terms, its ‘marginal cost’ is zero and it should be a freely-available, public good. But that would reduce rich countries’ monopoly power.
Aid is one way for well-intentioned countries to redress these inequities. Modest transfers of capital and knowledge mean little to the UK, but can transform lower-income countries, creating more balanced economic systems. In turn, the side effects of economic harm – terrorism, asylum-seekers, and global poverty and suffering – will subside.
Failures of government – such as high corruption – are wont to happen in countries rife with poverty and aid has an important role here too, by providing international solidarity and positive incentives for reform. The UK should support durable relationships with such countries that insist on the respect of basic human rights and good governance, and offer prosperity and partnership for those that accept these principles.
This is a call for the left to support aid. But a radically different form of aid, which is focused on solidarity, basic human rights, and the principles of equity and international socialism.