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Rich countries risk national interest through short-sighted aid policies – ODI research

Written by Nilima Gulrajani, Rachael Calleja

Rich donor countries risk undermining their own long-term national interest by using aid for short-term domestic gains instead of prioritising global poverty reduction, a new report by the Overseas Development Institute has found.

Researchers at the think tank have developed a ‘Principled Aid Index’ to rank donors on whether they use aid to further a safer, more sustainable and more prosperous world, or if they prioritise self-regarding and short-term interests.

Research suggests donors are increasingly prioritising their own domestic interests over the needs of the poorest. The index reveals 23 out of the 29 OECD DAC donors have become less ‘public spirited’ in how they spent their aid between 2013 and 2017.  The ‘public spirited’ component of the index measures whether aid is allocated to maximise development impact rather than short-sighted domestic return such as by minimising tied aid and not linking it to arms exports.  

The index shows the UK has lost the top spot since the Department for International Development published its ‘UK Aid in the national interest’ strategy in 2015. While the UK continues to score well on allocating aid based on need and global cooperation, it ranks lower on its public spiritedness scoring, mainly due to the above-average link between its aid flows and arms exports and a high percentage of informally tied aid.

Lead author Nilima Gulrajani, senior research fellow at ODI, said: ‘Political leaders are increasingly justifying aid as a means to advance their national interest. But national interest can be principled or parochial. 

‘Principled aid delivers a safer, more sustainable and more prosperous world which serves everyone’s national interest. Carbon emissions, infectious diseases, inequality and global terrorism affect rich and poor countries alike.

‘But we see a worrying trend of donors increasingly allocating aid to achieve short-term domestic returns. Since 2013 the vast majority of donors have become less public spirited to the detriment of global development prospects. Donors should seek to maximise development impact first and foremost by ensuring aid is targeted to the poorest countries.’

The index ranks donors based on how far they spend aid in support of need, global cooperation and public spiritedness:

  • In 2017, Luxembourg was placed top of the overall index for aid spending, followed by the UK and Sweden. The Slovak Republic, Greece and Austria were the three lowest ranked countries on the index.
  • The US and Canada saw the largest relative drop in public spiritedness, each falling 8 rank places between 2013 and 2017 to 20th and 15th respectively.
  • Donors are becoming more principled on average, but this is due to improved scores on the two principles of need and global cooperation.

Notes to editors

  • The Principled Aid Index launches on Tuesday, 26 March 2019
  • The index ranks 29 OECD DAC donors by scoring relative performance between 2013 and 2017 against 12 indicators.

For more information or to arrange an interview with one of the researchers please contact James Rush on [email protected]