Latest foreign aid revelations show decision to ringfence ill-advised

Prof Philip Booth says MPs' concerns unsurprising

Responding to the news that the House of Commons Public Accounts Committee has expressed ‘concern’ at the way foreign aid money is being spent in Africa, Prof Philip Booth, Editorial and Programme Director at the IEA, said that their concern is unsurprising as foreign aid has a terrible long-term record.

He said:

“Foreign aid has a terrible long-term record, and there is no positive relationship between aid and economic growth. The coalition’s current fixation with aid spending is ill-advised and simply continues a history of misguided government policy in this field.

“As other departments are having their budgets cut, the Department for International Development is seeing its budget increase. The record of foreign aid is already very poor and increasing aid rapidly is likely to lead to hugely diminishing returns and lessening outcomes  - indeed the net result may well be economic damage to the recipient countries.

“The coalition government policy with regard to aid focuses  on inputs – particularly the amount spent but also the number of schools built, and so on. We need instead to focus on outcomes such as the number of children being well educated – after taking account of the damage aid might do to "home grown" development efforts. If we were to do that, the government would cut the aid budget not increase it.

“There are ways to achieve growth in the developing world – encouraging trade, good governance and the nurturing of market economies – but continuing to waste taxpayers’ money in this way is not one of them.”

 

To arrange an interview with Prof Philip Booth, IEA Editorial and Programme Director please contact Ruth Porter, Communications Manager, 077 5171 7781, 020 7799 8900, rporter@iea.org.uk.

 

NOTES TO EDITORS

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.

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