Why is Britain such an outlier on aid?

March 18, 2015 22 By Duncan Green

My friend Ha-Joon Chang is Korean, and argues that for a development economist, growing up in South Korea is like being a physicist

Just add 'overseas aid'?

Just add ‘overseas aid’?

at the birth of the universe. I was reminded of that when the UK parliament enshrined spending 0.7% of gross national income on aid in national law last week – for an aid wonk, being British means you live, talk and debate in a bubble characterized by a high degree of interest, resources and a constant and exhilarating exchange of ideas. When I travel elsewhere in the developed world (Australia, North America, continental Europe), the contrast is painful: development ministries being closed down, budgets cut, and (at the risk of doing an injustice to any number of talented, dedicated activists and researchers) a palpable sense of being marginal to political debate and priorities.

The UK now accounts for roughly 1 in every 7 of the world’s aid dollars, and DFID is the only remaining cabinet level, operational aid ministry. The UK-based INGOs are disproportionately large and influential (4/11 of the largest are headquartered in the UK, and of the remainder ActionAid , now based in Johannesburg, has British roots). We have IDS, LSE, ODI and a bunch of other consultants and top academic institutions on developmental issues. So why is the UK such an extreme outlier on development? Is this just about a hangover of post-colonial guilt? Or is this more like an industrial cluster – a developmental Silicon Valley?

I raised this last week during an online debate on the Guardian Development Professionals Network and got some interesting thoughts. Action Aid’s Nuria Molina felt that “the ‘original sin’ is the post-colonial guilt, probably. But this is debatable because other former colonial powers don’t have such an industry. Today, I think it’s better explained by the very existence of an industrial cluster which, like any bureaucracy or organisation, really, tends to be self-preserving. For instance, there are many countries where I have lived where Development Studies degrees do not exist at all. Development is not a science, but rather people study politics and participation, or sociology, or water engineering, or medical degrees, etc. and they contribute to development – mostly at domestic level, but also overseas – according to their expertise.

Zoe Marks came back with ‘The question, though, is if we work with the ‘industry’ metaphor: what are we producing? Who determines supply and demand? To which I replied: OK. In my limited

clusters

understanding, the secret of clusters like Silicon Valley is that they are particularly creative and productive because they generate externalities between firms, e.g. on training and career development, and the buzz of networking produces piles of new ideas. The UK aid cluster and its revolving door between thinktanks, NGOs, media and DFID churns out a horrendous tide of aid jargon, but also some useful learning and progress. Their ‘product’ is knowledge and narrative, both academic and practical, about development, which is of interest both to our domestic market (including the public that funds us) and as an export.

But clusters can go out of business when new, lower cost entrants enter the market – eg when East Asia nearly destroyed the Brazilian shoe industry. Then the cluster is forced to move up market e.g. to design or higher quality, if it wants to survive. Perhaps the Aid equivalent would be that UK organizations focus on policy and research, and let low cost entrants like BRAC International do the service delivery. Worth developing?

Rashmir Balasubramaniam liked the cluster approach: ‘I’d be inclined to call it a cluster. Having just moved back here after some 10 years in the US, I can report that there’s a global health cluster rapidly developing in Seattle that is having increasing local and global effects. It is inspiring and drawing more and more people from within the US and from around the world to it, thus expanding the cluster and its influence. Such clusters reach a tipping point, beyond which there may be no (easy) turning back. Is that what happened to the UK? And has anyone quantified the impact of this development cluster on the UK?’

In this argument, the 0.7 vote is an outcome of the UK’s busy Aid and Development cluster, which generated both the campaign pressure, but also the underlying critical mass of knowledge, interest, concern and consensus,  that  led to last week’s extraordinary vote. Your views please!

This post also appears on the Guardian Development Professionals Network blog.