Written evidence submitted by Dr Alison
Evans, Director, Overseas Development Institute
1. The Government's draft International
Development (Official Development Assistance Target) Bill places
a legal duty on the Secretary of State for International Development
to ensure that the target of allocating 0.7% of GNI to ODA is
met by the UK Government by 2013 and in each subsequent year.
In responding to the draft Bill, this written submission considers
the following three issues:
(A) whether legislation is necessary to achieve
the 0.7% target in 2013 and beyond;
(B) the potential impact of the draft Bill on
the actions of other donor countries in respect of meeting their
ODA commitments; and
(C) whether enshrining the ODA target in legislation
is likely to affect the predictability of aid levels for developing
countries.
A. Is legislation necessary to achieve the
0.7% target in 2013 and beyond?
2. There is no a priori reason why
legislation is necessary to achieve the 0.7% target. The UK Government
has made important strides towards meeting 0.7 in recent
years (albeit from a rather late start) without it being enshrined
in legislation. All three major UK political parties agree on
the desirability of 0.7. The wider group of OECD/DAC members have,
with a few notable exceptions, all laid out plans to meet 0.7 between
2012 and 2015. For the first time in history the consensus
on levels of aid spending by the rich nations reaches across the
political and institutional landscape. One could then ask why,
in this apparently positive authorising environment, is it necessary
to turn the UK's commitment into law?
3. There are three potentially compelling
reasons:
(a) First, placing the commitment in law underwrites
the UK's policy position as a committed and determined international
actor. The UK is highly regarded internationally for its progressive
approach to development policy and its commitment to aid effectiveness.
The legislation places this commitment (at least in terms of aid
volume) beyond question.
(b) Second, the impact of the global financial
crisis on the public finances of the UK and other OECD countries
has altered the authorising environment for ODA. Financial and
economic volatility have increased the risk that, as a major (and
one of the few) source of discretionary spending, aid budgets
will be cut. The UK Government has stated clearly that the schedule
for reaching 0.7 remains on track but as long as the 0.7 goal
remains a policy commitment as opposed to a legal target, then
there remains the possibility that the UK ODA share could stagnate
or reverse under future Governments.
(c) Third, the public policy challenge facing
economically advanced and developing nations is significantly
more complex. Global risks have intensified while supporting and
managing the global commons has become an increasingly urgent
agenda for international cooperation. Such cooperation is financially
demanding and up to now the UK has played a full part. But there
are going to be difficult choices ahead about how much cooperation
and with whom. Placing the 0.7 commitment into law binds
the hands of future Governments to meet the core ODA commitment
even amidst these growing pressures (and opportunities) for international
cooperation.
4. Notwithstanding these compelling reasons
it would be wrong to ignore some important caveats to placing
the 0.7% target into legislation:
(a) The target is a product of a completely different
era in aid and development—one in which financing gaps were
fairly simply drawn and the role for the public intermediation
of aid was very large. The world is radically different now and
the development financing landscape has changed beyond recognition.
Not only are there many new sources of private and philanthropic
finance, every aid pound is chasing many more priorities than
in 1970. A target for aid-effort based on the percentage of national
income in rich countries instead of one based on the development
financing needs of developing countries themselves, is out-of-step
with this changed and changing world. It is not clear whether
as a result of this changing world the 0.7% target is too high
(because of the scale of other financial flows) or too low (because
of the scale of need), but putting the 0.7% target into legislation
carries the potential risk of locking in a formula that is inconsistent
with (or even worse, irrelevant to) this changing reality.
(b) The current ODA definition is imperfect and
is criticised as being inadequate to the task of defining the
global policy challenges of the world today. The demands on ODA
have also multiplied. While there is not much serious appetite
to redefine ODA at the moment there will certainly be some efforts
to do so in the not too distant future. Given this, and the fact
that we don't yet know the full scale of future financial demands
associated with climate change, insecurity and other global risks,
is this the right time for the UK to commit a 40 year old
target into legislation?
(c) The final caveat relates to whether the focus
on aid volume is the right one. 0.7 has been code for "commitment
to development" for several decades, at least in the
eyes of the international campaigning community. But we know that
while quantity indeed matters, quality of aid is paramount. A
lot of harm can be done with large amounts of poorly delivered
aid, while potentially a lot of good can be done with relatively
small amounts of high quality aid. Aid quantity targets should
not be used as a shorthand for the complex and politically difficult
process of development that the UK is looking to support. It almost
goes without saying that it is the extent to which aid is leveraged
for longer term development effectiveness which matters ultimately.
This is a difficult message for Governments everywhere to handle
but not one that should be side-stepped or overshadowed by the
much simpler and politically appealing messaging on aid volume.
B. The potential impact of the Draft Bill
on the actions of other donor countries in respect of meeting
their ODA commitments.
5. Supporters of the 0.7% aid target
argue that it has been a commitment by the rich donor nations
dating back to the Pearson Commission of 1969 and the UN
General Assembly of 1970. But the goal, as it was originally conceived,
was not a binding international commitment from the beginning.
The UN General Assembly did not vote on it in 1970 and while
it has become one of the most durable and memorable points of
consensus in the history of international development, it has
not had great traction within the donor community until relatively
recently.
6. During its 40 year history, as a
signalling and commitment device, 0.7 has had a relatively
weak record of success. It is worth noting that the five nations
that have already achieved 0.7 had done so before the latest
push around 2005. Some countries were closer to the target in
the past than they are now eg Canada. And no country since 2005 has
reached 0.7%. The target has also had its major detractors, most
notably the USA which has treated the target with varying degrees
of disdain over the last four decades. Little has changed here.
7. While overall ODA levels have risen significantly
in the last decade, based on the mixed record to date there is
no particular reason to believe that the UK putting 0.7 into
legislation will change the behaviour of other donor nations with
respect to their ODA commitments.
C. Whether enshrining the ODA target in legislation
is likely to affect the predictability of aid levels for developing
countries.
8. At the most macro level there is reason
to believe that committing 0.7 to legislation creates a more
predictable aid environment for the UK's partner countries. Yet,
total ODA is a less relevant indicator for country-level decision
making than the measure of Country Programmable Aid (CPA) now
used by the OECD/DAC. CPA is the amount of aid that is directly
programmable by the donor, so it excludes the most unpredictable
elements of aid including humanitarian spend, debt relief, cross-border
flows and anything not part of cooperative agreements between
governments. Currently the share of UK country programmable aid
is 65% of total UK ODA.
9. It is reasonable to assume that if 0.7 is
to increase predictability it is also relevant to monitor the
share of CPA. Comparing across countries that have already achieved
0.7 the range of CPA is quite wide, from 70% in Denmark to
40% in the Netherlands and 51% in Sweden, suggesting that there
is no simple correlation between 0.7 and the share that is
directly programmable by the donor and therefore directly under
the influence of partner countries themselves.
10. It is also the case that predictability
is as much a function of the quality of the aid partnership
at country level and the ability of the donor to make credible
commitments, irrespective of quantity. The UK has shown itself
to be a leader in this respect, establishing medium-term partnership
agreements with many partner countries, without the 0.7% legislation
in place.
11. In conclusion, for greater predictability,
making 0.7 binding in law will only help if the share of
CPA is carefully monitored and if it translates into more credible
and transparent (medium term) financing commitments in the most
important country contexts.
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