Opinion: Reducing inequality, not just poverty, should be the central aim of aid

Equality is undeniably the new frontier for international cooperation. During the long period of negotiation that led to the Sustainable Development Goals, there were essentially two camps: those (generally including the major donors in the North) who preferred a kind of Millennium Development Goals-plus set of goals, still closely focused on MDG-like extreme poverty objectives; and those (generally including Southern governments) who were arguing for something more expansive, a holistic vision for a fairer world.

There is no doubt which side won.

Not only does income inequality have its own goal — confounding sceptics like myself who doubted whether some countries, such as the U.S. and U.K., would sign up to such a thing — but inequality thinking imbues the SDGs, as we are encouraged to “leave no-one behind” and disaggregate data to ensure that all social and income groups benefit from progress.

One needn’t resolve the debate over whether and by how much inequality is worsening to see that the international community, and national leaders, are taking inequality seriously in a way that was unthinkable only a few short years ago, when raising the issue marked you out in powerful circles as a potential socialist.

In the same way as the world woke up to racism and sexism in the 20th century and focused its considerable brainpower and solidarity on doing something about it, with some success, so in the 21st century, it seems plausible that a similar movement will be built around other forms of inequality.

In fact, the very concept of sustainable development has equality indelibly associated with it. In a world of limited resources and a growing population, sharing things out more fairly in the 21st century may be the only way humanity can survive into the 22nd.

The universality of the SDGs, breaking that patronizing separation between developed and developing countries, implies a new era of equal treatment, whereby standards of living enjoyed by the wealthiest countries should now be in the purview of historically poorer ones.

But while the epic battle, played out in the grey corridors of U.N. conference rooms, has been won, the traditional world of aid appears not to have got the memo.

There is one major difference between extreme poverty and inequality. While it is conceivable, and on balance even looking probable, that the world will all but eradicate extreme poverty within a period of decades, the challenge of inequality will be perennial.

It is certainly possible to reduce levels of inequality both at an international level (between countries) and nationally (between citizens of the same country), as has been proven at various points in the past 50 years. But any sensible analysis of human history or present-day political conditions will conclude that, while it has peaks and troughs, inequality is a constant aspect of human societies.

Even what appear great steps forward for equality — as we saw in Latin America in the first decade of this century — are only pigeon steps when the scale of the problem is reviewed. In short, there is always so much more to do.

So what does that mean for aid in the SDG era? Let’s follow the logic.

When the aim of aid was to end extreme poverty, it made sense to argue aid would end when that goal was achieved. But the new aim of aid is to fight inequality, and we know we will never end inequality and that constant work is required to combat it. Aid, therefore, will always be needed.

The challenge for aid in the 21st century is to respond in theory and practice to this changing reality, one in which all countries now expect not just to deal with extreme poverty but to converge on decent living standards for all.

Of course such assistance will only ever be a small part of the response to inequality and unsustainable development, just as it has been a bit part player in the fight against extreme poverty. But it plays a part nonetheless.

The aid industry needs to respond to this in two ways. First, it needs to alter its narrative, explaining to the public and politicians that aid is not temporary — as had previously been implied — but permanent. That might help end the constant media debate about whether to give aid and how much it should be. It is a permanent feature of the modern global economy.

And second, just as important, it needs to elaborate a new theory of aid that better reflects this new goal for aid and the new global context within which aid operates. The current theory of aid as a temporary injection of capital in a “big push” to get poor countries moving economically is wholly inadequate for a world in which inequality is rising rather than falling in most countries, leaving a classic conundrum in which international assistance is required to support “pockets of poverty” in countries that on paper could and should be far more redistributive.

As an example, the endless debate about aid to “middle-income countries” is constrained not only by the difficult politics and limited budgets, but also by the lack of a theory to support such spending — even when backed up by an empirical analysis of the need and effectiveness of international cooperation in such contexts.

The conditions need to be set for global convergence and national-level social cohesion. Just as for racial and gender inequality, progress can be reversed just as it can be enhanced. Political will is required to set a conducive policy framework and financial assistance across borders will be a part of that.

Reducing inequality, not just poverty, should be the central aim of aid. This is the profound paradigm shift now required to respond to the world as we find today. The sooner academics and aid managers understand that, the sooner aid will emerge from the limbo in which it currently finds itself.

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