Guinea-Bissau’s leaders will at least be pleased it’s not the other way round.

But what, exactly?

In a post responding to David and my Chatham House report on UK foreign policy, Oxfam’s Duncan Green expressed a worry that our argument appealed too much to the new mood of the national interest. What we’d missed, he argued, was the sense of moral purpose that can energise support for development.

We should appeal to hearts as well as heads. Otherwise we risk giving up one of our strongest cards – moral suasion. The reason why the new government has gone out on a limb in pledging to increase aid despite the fiscal meltdown is surely not just about crude self-interest, but at least partly springs from a desire to do the right thing. To, dare I say it, change the world.

ODI’s Simon Maxwell made a similar point in an email to me, arguing that

Your ‘case for foreign policy’ is at first sight defensive and UK-centric i.e. only about defending UK interests. Where is your moral commitment to the MDGs or global stewardship of the world’s people and resources?

Fair questions – not least since much of my own take on development and foreign policy is based on what I consider moral. When people ask me ‘why we’re funding hospitals in Malawi when we’re closing them down at home’, part of me is stunned that the question should even need to be asked – given that in Malawi 5.5% of mothers die in childbirth, as compared to 0.01% here. 

But at the same time, the lobbyist in me is hesitant about using morally based arguments. I always have the hunch that anyone who finds them persuasive is already, well, persuaded – and hence that they’re of limited use in enlarging the progressive foreign policy tent. Politically, the idea of an ‘ethical foreign policy’ is still seen as having been an albatross around Robin Cook’s neck at the Foreign Office. And above all, I worry that proponents of the national interest find it easy to paint moral advocates as starry-eyed, particularly given the wider backlash against aid.

But what intrigued me about Duncan and Simon’s responses is that neither of them mentioned an idea that we used to hear a lot about in discussions like these – interdependence.

Five, ten years ago, every foreign policy speech, article, position paper was full of talk of interdependence. I was a big fan. Interdependence seemed to me to imply that, as long as you took a sufficiently long term view, it would become clear that progressive foreign policy objectives are the national interest.

Yet today, it seems as though progressives use the interdependence argument much less (and I include myself in this).  Why not? Well, I have four hypotheses, each of which I suspect has part of the story.

First: interdependence simply got oversold. Yes, state failure can create ripples outside the state’s borders, and some of these ripples – refugee flows, for instance – can reach the UK. But it’s easy to overstate them. State failure in Haiti has practically no security implications for Britain. Piracy off Somalia is no more than an irritant to the global maritime sector. Admittedly, failed states can create safe havens for terrorists or organised crime – but as 7/7 showed, terrorists can just as easily plan an attack in Yorkshire.

Second, on a related note: progressives realised that stuff we minded about was missing from the interdependence story, or fit into it only awkwardly. Interdependence could provide arguments for (say) intervention in Darfur, or for increased aid overall. But it was harder to make interdependence-based arguments for, say, investing in health systems in Malawi – where moral arguments  are clearly easier to apply than interdependence-based ones (although you absolutely can find the interdependence arguments even here, if you look for them – starting with, for instance, swine flu).

Third: interdependence became entangled with the messianic zeal of the neocons. Much of the case for war in Iraq was built on arguments about interdependence, especially in the UK. Interdependence is still used today to justify NATO’s continuing presence in Afghanistan, despite a growing public belief that the mission has increased rather than decreased the risk of terrorism (both here and there). More generally, interdependence perhaps got caught up with the weird, paranoid years that followed 9/11 – and has suffered for it as the policy agenda has moved on.

Finally, and perhaps most importantly: what started off as a hopeful narrative became increasingly fearful. Back when all the talk of interdependence began, we were still in a prolonged period of prosperity. The Cold War was over. People talked about “the Long Boom”. Happy and secure at home, we could start thinking as a larger global family, and so we set out to rescue Africa or the Balkans from their travails.

But as the 90s gave way to the 2000s, we found ourselves in a decade of terrorists, fuel and food price spikes, financial crises, global downturns – all of which were perceived to have come about as a result of interdependence. Rather than being a hopeful discourse of global solidarity, interdependence became more associated in the public mind with big, amorphous, scary risks – with the almost inevitable result that publics started to focus on a smaller ‘us’.

Hence a pulling back to the ‘national interest’ – met, from the other side of the argument, with renewed calls for us to remember the moral basis for looking out for the poorest and most vulnerable.

But at the same time, I think it’s too soon to call time on interdependence. It is still an interdependent world. We do still face common, massive risks, which we ultimately have to tackle together or not at all.  Next time debate comes back to interdependence, everyone will be a little older and wiser after the turbulent, fearful decade now drawing to a close – and perhaps that’s no bad thing.

But to give Duncan and Simon their due, I have to concede that interdependence only takes us so far. The bottom line, as ever, is that poor people are far more vulnerable to most global risks than the global middle class. Climate change and resource scarcity will be a horror story for them before it’s even an inconvenience for us. The realisation that ‘we ultimately have to tackle global risks together or not at all’ may come too late for an awful lot of poor people who’ve done nothing to create the problem – and if that doesn’t lead you straight to a moral argument, then I don’t know what does.

Interesting then to see this 2008 review (huge pdf download) from Nigeria’s National Planning Commission, which sets out to analyse ‘the volume and quality of Official Development Assistance to Nigeria between 1999 and 2007.’

During this time, $6bn of aid has been spent in Nigeria, almost all of it spent by donors themselves, rather than being rooted through the government’s budget. The Planning Commission’s first job, therefore, was to try and work out who had spent what.

So it sent a template to donors asking for information on what they’d spent and where:

Of all the agencies, USAID was the only agency able to provide almost all the requested information with a little delay. EU was also able to meet most of our requirement, only after about three months delay…

CIDA’s [Canada] claimed disbursement did not tally with what they had actually spent…[It] refused to supply more information when asked [to]…

DFID is another donor that could not account for all its activities. When asked to provide information on the sectors and states DFID is operating in, it simply wrote saying ‘we do not require our programme managers to collect expenditure on a state-by-state basis.’…

JICA [Japan]…did not cooperate at all despite our many efforts to get JICA to collaborate with us.

The UN system was also only ‘partially cooperative’. UNICEF did not provide a breakdown of its health spending, for example (nor did DFID or CIDA). “We do not know exactly what [this] money was spent on,” the report notes. The Chinese government was also asked for data – but the review does not tell us what its response was (read into that what you will).

Donors should be much more transparent accountable for their activities, the Planning Commission concludes, while the Nigerian government “needs to offer clearer and more effective leadership to her development partners both in terms of how and where to operate.”

It lauds the example of Kano and Ondo states. They are robust in their response to ‘intruder donors’ who operate outside a framework established by the state government. That allows leaders to set, and be accountable for, their own development priorities.

Update: Of course, Nigeria’s own statistics are often woefully inadequate, whether at national or at state level. Recently, for example, Kano state has just been counting its schools:

An additional 88 senior secondary schools and 174 private  schools had been ‘discovered’, while in some areas schools had disappeared: the Kano municipality had 10 less junior secondary schools than first thought.

Update II: Worth pointing out, too, that the World Bank, DFID, USAID and African Development Bank recently agreed a joint strategy for Nigeria – bringing 80% of Nigeria’s development assistance under a single strategic umbrella. Somewhat oddly though, it cannot easily be found on any of the donors’ websites. There’s a copy here though.

I wonder if the donors will now move towards a single online platform to show what they’re spending, where, and what results it’s achieving… and, also, how effectively their joint approach is proving (the Bank and DFID have had a joint strategy for some years now) at reducing overhead for Nigerian government and non-government partners.

“The nature of the ties linking the African with the European has not really changed since the first Portuguese ships went sailing down the west coast of the continent: the sophisticated magic of the white man remains irresistibly alluring to the black.” (Shiva Naipaul)

In all the debates about aid, its visual impact is rarely remarked upon. In rural areas, aid probably looks like a good thing. When you see that a donor has dug a well for your village, you may feel grateful to and enthusiastic about the donor (that is, if you don’t feel embarrassed that your community has failed to dig its own well – a fact rammed home in nearly every village in Guinea-Bissau by a billboard placed next to each well proclaiming that it was a gift of the Kuwaiti, Spanish, Portuguese or American people).

But in cities, to which young Africans are migrating in droves, the visual effect is more ambiguous. When the urban African looks at aid, he sees aid workers and missionaries driving around in brand new Toyota Land Cruisers or Hiluxes. He sees them staring at laptops or chatting on snazzy mobile phones. He sees them dining in expensive restaurants or drinking in smart cafes. And he sees their glittering air-conditioned offices and villas, with iron gates and security guards.

In countries like Senegal, where there are tourists and Western businessmen, aid workers do not stand out. But in poor, remote, unvisited Guinea-Bissau they play an important part in shaping perceptions of the developed world (Guinea-Bissau has no cinemas, precious few internet cafes or televisions, and no press to speak of). And, as they have done for centuries, Africans see all this opulence and want a part of it. Guinean politicians, grown rich on drug money, purchase Land Cruisers and build gated villas. Ordinary citizens spend more than they can afford on mobile phones. And young Guineans, who until recently have not joined the West African exodus to Europe, have begun to talk about taking the boat to Spain – a journey which at least one in six of the many Senegalese who attempt it does not survive.

Of course, foreign aid workers are not the only cause of this new yearning, but it is likely they play some role. Many young Guineans I spoke to, who do not want to risk the trip to Spain, are desperate instead to work for foreign NGOs or the UN. It could be argued that giving young Africans something to aspire to will hasten progress and encourage hard work. Maybe so, but is owning a mobile really progress when you can’t afford your daughter’s $10-a-month school fees (as one mobile-owning mother in Bissau complained to me recently)? And in a country like Guinea-Bissau where aspiration is outpacing people’s capabilities and even well-intentioned governments are struggling to manage expectations, are ostentatious displays of affluence the best way of promoting peaceful development rather than the violent upheavals Nigeria, Guinea-Conakry and others are beginning to experience?

In typically sceptical fashion, Emmanuel Yujuico at IPE Zone points out that ‘you also have to consider that several books have followed the same formula of catchy title plus scepticism about aid. Others have said it earlier–and better.’ He’s right, and people like James Ferguson have been writing on this for a number of years, but it’s worth noting that none of those authors (to my knowledge, at least) were black. As has been noted by Niall Ferguson, who wrote the foreword to Dead Aid, it is pleasing to see a ‘popular’ book on development that has been written by an African woman, rather than an American male. That said, as Global Dashboard’s own Jules Evans points out, Moyo hasn’t lived in Africa for years. Moreover, her career has followed the path of the archetypal high-flying western development worker – Oxford, Harvard, Goldman Sachs and the World Bank.

Back in February, Global Dashboard asked where the Dead Aid argument leaves traditional developmentists: ‘will they all dig in for a defensive game, or is a serious process of strategic renewal finally in prospect?’ Since then, promotional opinion pieces and interviews for Moyo’s book have led to a spate of debates (surely that is the correct collective noun?) within the development blogosphere and wider media that may be able to shed some light on this question.

In the early days of the debate, Francis Fukuyama, writing in Slate attacked Moyo’s critique of loans from international public institutions:

Were it not for the continued availability of concessional loans, she argues, African countries would be forced to get their acts together and meet international governance standards so as to be able to access global bond markets… Moyo’s case that Africa would have good government if it weren’t for the influx of aid stretches credulity.

Indeed, it’s that word ‘forced’ that is troubling. Forced at what cost? ‘Getting their acts together’, one suspects, would involve fiscal austerity still more severe than that demanded by multilateral development loans at present.

A few days ago, Jeffrey Sachs, the big beast of popular development evangelism (and an old teacher of Moyo’s), defended his industry (yes, it is an industry) in the HuffPo. In a dubious rhetorical flourish with echoes of Ha-Joon Chang, he accused Moyo of trying to kick away the ladder she used to get her impressive education (i.e. scholarships, which he equates to aid). Sachs adds:

Of course, most Americans know little about the many crucially successful aid efforts, because Moyo, Easterly, and others lump all kinds of programs – the good and the bad – into one big undifferentiated mass, rather than helping people to understand what is working and how it can be expanded, and what is not working, and should therefore be cut back. Nor do Americans hear that many poor countries graduate from the need for aid over time, precisely because aid programs help to spur economic growth and successfully prepare countries to tackle future priorities.

Yet if Sachs is angry about Moyo not mentioning aid’s successes, he is himself equally disingenuous about the diverse failures of aid regimes over the past half-century. He doesn’t seem to have any answer to this except to demand more aid. In the meantime, here in Britain, the Dead Aid debate reached the Hay Festival last week, where Martin Kettle argued that:

if good intentions could change the world then the advocates of aid would have redeemed Africa a dozen times over. Yet good intentions and admirable motives, while obviously better than malign intentions and suspect motives, are not enough. Africa has 100,000 millionaires. Every African alive today has received roughly $5,000 in aid.

Moyo struck back at her critics (Sachs in particular), with the point that ‘yes an aid-funded scholarship will send a girl to school, but we ought not to delude ourselves that such largesse will make her country grow at the requisite growth rates to meaningfully put a dent in poverty.’

To prevent this post growing to an unwieldy length (and readers’ attentions dwindling in inverse proportion), I’ll let you follow the rest of the debate: Sachs and McArthur reply to Moyo’s reply, at which point William Easterly intervenes on a point of geography. Mo Ibrahim suggested that we need to be paying more attention to something ‘good governance’, though what that might mean is unclear. Kevin Watkins (of the UNDP and Oxfam before that) pointed out that Moyo is tilting at windmills. Indeed, in a phrase I’d like to borrow from Laurie Penny, she is deploying a straw man so large that you’d expect to see Christopher Lee dancing around it. As Watkins rightly says:

most advocates for increased development assistance recognise that aid is not a cure-all for poverty and that trade is critically important (most of Moyo’s evidence on trade is actually lifted from Oxfam). They also recognise that corruption is a serious problem, that aid is often less effective than it should be, and that aid flows have to be managed to prevent economic distortions that can harm growth prospects.

Finally, Saturday’s editorial in The Guardian told us that ‘when a Zambian-born economist like Dambisa Moyo, in a much-debated new book, says aid is part of the problem, and gets a round of applause from many Africans, it is time to listen, although not to agree.’ Quite.

No doubt this is a debate that will continue for some time. This is a well-written set of articles, to be sure, but it’s not clear that any of these writers are really engaging with each other’s core arguments and assumptions. Perhaps it would be better to get them all in the same room, or at least on Bloggingheads.

Of course, common sense dictates that this shouldn’t really be an argument about aid or no aid, but about how aid is spent. The days when money was thrown at the problems of the developing world are well and truly over and development programmes have been getting ever more sophisticated in this respect.

However, it should never be forgotten that these are not purely questions of economics. As we students of international political economy are fond of saying, it’s about the politics, stupid. The choices over how aid is spent cannot be seen solely as ‘scientific’ economic decisions – they are socially bound and politically contested. It is in the sphere of politics that the real aid debate needs to be conducted, where the important questions are not about if, but about how aid is to be used.

Plus, it turns out that one of the other G20 voice bloggers is Daniel Kaufmann - now at the Brookings Institution, before that at the World Bank.  He’s one of the top governance experts in the world (the FT’s words), and was one of the World Bank staffers who really put pressure on Paul Wolfowitz during the 2007 graft kerfuffle - if you recall the letter that he and other Bank staff sent to Wolfowitz, it read

The credibility of our front-line staff is eroding in the face of legitimate questions from our clients about the Bank’s ability to practise what it preaches on governance.  In these circumstances, we cannot credibly implement the governance and anti-corruption strategy.”

Hats off for that.  Next up: bloggers’ press conference wit Douglas Alexander coming up shortly.

It is unclear how aid flows are responding to the slowdown but the most recent data (which predate the crisis) hardly encourages hopes of a substantial expansion. Aid from OECD countries fell between 2006 and 2007, partly because of an exceptionally high level of debt relief in 2006. Disregarding this one-off effect, aid only crept up by 2% in 2007. And as a new report from the OECD points out, a 1970 United Nations target for aid of 0.7% of rich-country GDP remains a distant dream. Only Sweden, Norway, Denmark, Luxembourg and the Netherlands have reached this target. The average contribution is 0.45% of GDP.

And this sum was calculated before donor countries were hit by an economic crisis that has shifted priorities dramatically. Moreover, the size of the overall pot in rich countries will shrink as economies contract. Maintaining current levels of aid implies the unlikely earmarking of an even greater share of GDP.

Ah, the target of giving 0.7% of GNI to development assistance: bow your heads in reverence.  But hang on a minute.  Why are we all paying so much attention to a target that’s (a) not based on any assessment of how much money is needed to achieve any defined set of objectives, and (b) nearly forty years old?

Just think of how much has changed in the finance for development context over the past 40 years. There’s the explosive growth in remittances from migrant workers, for starters – which in 2006 totalled $280 billion, three quarters of which went to developing countries. That makes a finance for development flow of $210 billion from migrant workers in 2006 – almost exactly double the $103.9 billion that went to official development assistance in that year. So presumably that affected how much ODA was needed? Nope.

Well, what about the growth of philanthropic donors, then – the arrival on the development scene of deep-pocketed billionaires like Bill Gates and Warren Buffet? The Gates Foundation alone has an endowment of $60 billion, so philanthropic donors as a whole might be taken as a pretty transformational shift on finance for development. But the 0.7% target remains inviolate.

Well, what about the fact that some of the most popoulous developing countries have hoisted hundreds of millions of their people out of poverty over the last decade – and are now building aid programmes of their own?  Surely that affects the ODA needs assessment? Um, no.

If these examples lead you to suspect that the 0.7 target is taking on some of the attributes of a sacred cow, then try this for size: when, as part of the UN Millennium Project, Jeff Sachs – about the biggest enthusiast for more aid on the surface of the planet – calculated how much aid was needed to achieve the Millennium Development Goals around the world, the figure he ended up with was 0.54% of donor countries’ gross national income by 2015.  So did that lead to 0.7 being consigned to the trash? Er…

And all this is before we even consider how finance for development needs might change in the future.  Take climate change adaptation.  Everyone agrees climate change will hit developing countries hardest, even though they have the least capacity to adapt.  How much it will cost is widely debated: the UNFCCC Secretariat thinks $28-67 billion by 2030, the World Bank says $10-40 billion (no timetable given), the UN Human Development Report puts the figure at $86 billion dollars a year by 2015.

Despite these divergences, on one point all agree: of course these sums should be additional to nought point seven. Yet it’s not immediately clear why: if the challenge of climate adaptation is all about mainstreaming climate resilience through development programmes as a whole, then it seems mighty strange to assert that all the expenditure should be additional – without admitting that even a single dollar might just need to be spent differently, rather than additionally.

Of course, you might argue that I’m just splitting hairs, and that the bottom line is that it’s abundantly clear that more aid is needed in order to achieve the MDGs, and that 0.7 is a crucial rhetorical target in holding rich countries to account – especially now, with the credit crunch already eroding aid flows.

But I’m not so sure. For one thing, I think there’s an issue of credibility at stake. Changes like remittances, philanthropic donors, the emergence of the BRICs and financial requirements arising from global risks like climate change are all major shifts for development.  We development advocates risk coming across as rather defiant of the facts if our answer to how much money is needed is always (as if by magic) 0.7 – when everyone else can see how much has changed since that figure was determined.

This credibility point matters more, not less, because of the credit crunch.  We can all see that the development agenda is at serious risk of a major public backlash on aid effectiveness as publics feel the pinch and realise how much of a fiscal burden their governments are taking on through their economic recovery packages.  As we make the case for development in these difficult circumstances, we need to be sure that our case is backed up proper data – which 0.7 clearly is not.

But most fundamentally, it’s time to rethink 0.7 because so many of us in the development community have privately felt for some time that even if the aid volume emperor isn’t exactly naked, he’s certainly scantily clad.

If cash could buy development, then why haven’t we seen more of it after spending so much?  Why is it that the developing countries that have really taken off seem to have managed it without massive aid flows? And if effective states are so crucial for development, and taxation is so critical to building up social contracts between states and citizens, then isn’t there a pretty big risk that we risk undermining that social contract by supplanting developing country governments’ needs to tax their citizens? And so on.

None of this is to fall into the ideological trap of saying that ‘development doesn’t work’; I’ll leave that to William Easterly. But in talking so much about 0.7, we constantly reduce the complex process of development to a discussion about aid – when in fact, we all of course know better than that.

If we really want a full-spectrum approach to development, we need to place a bit less emphasis on aid and a lot more on (a) political economy work in countries – the slow, steady process of using influence at the margins to work with progressive drivers of change towards pro-poor political outcomes in country; and (b) global issues, like climate change, tax havens, the arms trade, trade liberalisation and so on.

Those challenges are less about the quantity of aid than they’re about influence – and hence the quality of people who work for donor agencies (which, in the UK at least, is generally exceptional – a shame, then, that DFID’s headcount has been slashed in recent years even as its aid budget went through the roof).

This is the kind of development agenda I wish we talked about a bit more.  Within that broad context, I’m even prepared to admit that it might be the case that we need to spend more on aid than we do today. But before I sign up, please can I see some data?