Why Ring-fencing UK Aid May Hurt DfID

Increasing the British foreign aid budget, at a time when budgets of other U.K. government departments are being slashed, may do more harm than good, according to the Guardian’s Nilima Gulrajani.

Ring-fencing U.K. aid may increase the pressure on the Department for International Development to deliver “quick, measurable” results, Gulrajani, also an assistant professor at the London School of Economics and Political Science, notes.

“But this is not the same thing as delivering long-lasting development impact. Making health systems run or schools work or growth take off requires more than higher cash investment in hospitals, schools or roads,” she writes in the Guardian.

Despite an increased budget, DfID will have to work with fewer staff as its running costs are expected to be reduced to 2 percent of total spending by 2015.

“This threatens to divert monies to quick-disbursing multilateral funds at the World Bank or United Nations, where value for money can be even harder to ascertain. If we accept that poverty reduction is not fundamentally a financial problem but a problem of weak institutions, pressures to disburse large sums of money with limited staff oversight and in situations of fragile governance appear an unlikely recipe for development success,” Gulrajani argues.

Using aid to pursue defense and foreign policy objectives also poses a threat to “the poverty-focus of British aid spending for which it has received worldwide kudos,” she adds.

“Singling DfID out for special treatment is sacrificing public support for aid that has been so critical for DfID’s past successes. This looks set to worsen as DfID phases out programs to foster development awareness among the British public as part of recently announced efficiency savings measures. An entire generation of supporters of sensible development and aid policies is now at risk of never being fostered,” Gulrajani notes.

>> What Determines Aid Allocation, Poverty or Security?

Meanwhile, the European Union has lauded Britain’s move to ring-fence its aid budget.

“The crisis is never an excuse for decreasing development aid,” European Commissioner for Development Andris Piebalgs was quoted by EU Business as saying. “The decision taken by the United Kingdom is a turning point.”

About the author

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    Ma. Rizza Leonzon

    As a former staff writer, Rizza focused mainly on business coverage, including key donors such as the Asian Development Bank and AusAID.