World's wealthiest increasingly putting national interest before altruism when allocating aid

9 November 2020

Wealthy countries are increasingly spending foreign aid to promote national interests rather than reduce global poverty, a new ODI report has found, with a fall in principled aid scores amongst donor countries.

ODI’s Principled Aid Index examines whether aid is being allocated to maximise development impact and confront global challenges, or whether it is being directed towards short-sighted commercial and geo-strategic returns including aid tied to influencing elections, trade deals and arms exports.

Principled Aid Index Rankings 2020

Ireland is ranked at the top the Principled Aid Index, followed by Norway and Sweden.

The United Kingdom ranks in 10th place on the index, and like other donors has seen a fall in their principled aid score.

The United States has continued to decline in the rankings, dropping a further five ranks. This was the largest change of any donor.

France ranked lowest of any G7 country, coming in at 19th place. France has been a notable poor performer on assisting conflict-affected states.

Newer DAC members within the Eastern European region are concentrated at the bottom of the rankings, with the Slovak Republic taking last place behind Hungary and Greece.

Covid-19 Response

The fragmented response by bilateral donors to the Coronavirus crisis over the last eight months is in keeping with this downward trajectory of principled aid. This will undercut decades of progress towards securing the UN Sustainable Development Goals and the target to end extreme poverty by 2030.

In the first phase of donor response, securing priority vaccine access and restricting medical exports have reduced national exposure to the pandemic's worst health effects. Bilateral assistance has been primarily directed towards global funding vehicles addressing the immediate health emergency, with less investment to address the wider socio-economic consequences in affected countries.

Donors must now commit to addressing structural social and economic issues in the long-term to build resilience and reduce vulnerability to future pandemics and other emerging global challenges.

Nilima Gulrajani, Senior Research Fellow at ODI and lead author of the report, says:

All countries now need to collectively focus on addressing the systemic global inequalities laid bare by the coronavirus crisis, and the tenets of principled nationalism can guide these efforts. Until now countries have reacted to the pandemic as though they were in a plane in freefall, securing their own oxygen masks before helping others. While perhaps an understandable first response, donors must now urgently look to assist others in need."

Indeed, the global pandemic is increasing the number of people at risk of falling into extreme poverty. Estimates from ODI’s recent report Reducing poverty post Covid (Manuel et al, 2020), suggests that it will take at least ten years before extreme poverty numbers return to their pre-crisis levels.

Marcus Manuel, Senior Research Associate at ODI, says:

The Covid-19 pandemic has wiped out years of progress in ending extreme poverty. By 2030 there will be 680 million people living in extreme poverty – nowhere near the target of zero that world leaders adopted five years ago.

Long term fiscal response plans to Covid19 must include provision for increasing global preparedness and reducing global inequality by channelling an additional $77 billion a year for the poorest countries and better prioritising existing aid. This would ensure all countries could afford at least half the costs of the investments needed and should be the minimum global financial solidarity target.”

ODI’s researchers highlight that altruism and national interest are not zero-sum concepts. Principled nationalism allows donors to provide aid to those who need it whilst also developing mutually beneficial partnerships, yet this approach to aid amongst donors is declining. Overall, it is clear that countries are seeking to allocate aid towards sectors and geographies that speak to their strategic interests. Previously higher ranked donors are driving the fall in average principled aid scores, including Sweden, Canada, Ireland, Iceland, Denmark and Norway.

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For further information or to interview the researchers please contact Charlotte Howes at ODI on +44 7808 791 265 or at [email protected].