How to Save Foreign Aid in the Age of Populism
The idea of development assistance is under attack in western democracies. Pursuing economic justice at home and abroad, launching a new freedom agenda, and framing aid as innovation rather than charity can help end the backlash.
Around the world, extreme poverty has fallen, access to basic health care and education have risen, and deaths due to violence are at historic lows. Yet all is not well. Inequality within countries is rising, the number of forcibly displaced persons is at an all-time high, and climate change is exacerbating epidemics of drought, flood, migration, and disease.
These challenges require robust responses, but the political mood in the United States, the United Kingdom, and other wealthy Western countries has turned against spending on foreign aid. National interests, not global goals, seem the currency of the times. The win-win mindset inherent in U.S. President John F. Kennedy’s invocation that “a rising tide lifts all boats” is today challenged by a Trumpian zero-sum mindset that appeals to America Firsters, Brexiteers, and nationalist, xenophobic, populist parties across Europe.
Foreign aid and international diplomacy are among the targets of this movement. Populist leaders both want to reduce aid and shift its purpose from helping the neediest abroad to more self-serving political and economic ends. President Donald Trump has repeatedly attempted to slash U.S. development assistance and to use it as a tool to reward allies and punish countries that vote against the United States at the United Nations.
Just last week, the White House froze up to $4 billion in aid already authorized by Congress in what many saw as an effort to suddenly repurpose the funds for Trump administration priorities. In the United Kingdom, the conservative press relentlessly attacks British aid spending while supposed advocates of Global Britain argue for abolishing the Department for International Development and returning to an era when aid was used to boost U.K. trade and contracts for U.K. firms.
There is an urgent case for a new political narrative and policy framework to support foreign aid in this age of anxiety. The threat today is not just to the multilateral system but to the liberal internationalist thinking that underpins it. The challenge is as much about politics as it is about policy, and the threats to public support are both in the political economy of wealthier nations and in the policy environments of low- and middle-income countries confronting a rapidly changing geopolitical and economic environment.
In values-based, generous societies like the United States and Britain, foreign assistance remains a vital instrument that, when deployed effectively, is both morally right and strategically smart. Providing aid is not simply an expression of national altruism: It is also an expression of enlightened national interest. For example, stopping Ebola in West Africa was both a just intervention for the millions facing the risk of death and a strategic necessity to prevent conflict, economic collapse, and a global health crisis.
However, when too many members of a society feel that their government is doing too little for its own people, when citizens feel left behind, any proclivity toward altruism becomes vulnerable to anxiety, anger, and a sense that there isn’t enough to go around. How can we pay to build infrastructure in Africa when our own roads and bridges are crumbling, citizens might ask. Why do I wait for health care while we spend billions of dollars to build health clinics in Afghanistan that the Taliban blow up? Why are my wages stagnating while we train the Vietnamese to take over the garment industry?
But the world’s problems aren’t going away while Americans or Britons “nation-build at home.” Left unchecked, climate change is poised to upend the economic and social order at an unprecedented scale. The global population of migrants and refugees continues to balloon, with more than 68 million people forcibly displaced from their homes. No walls, referendums, or U.N. compacts will stop people from moving abroad to survive when conditions at home become unbearable. And mutating diseases such as Ebola and bird flu could tear through an interconnected world without formidable global health warning and response systems in place.
In 1961, the year Kennedy created the U.S. Agency for International Development, the United States accounted for 40 percent of the global economy and was making plans to go to the moon. The combination of long-running growth, technological innovation like the Green Revolution in agriculture, and global Cold War competition spurred the industrialized economies to form a club of donors committed to helping the rest of the world catch up.
For several decades, leaders across the political spectrum in Washington and London were able to justify spending tens of billions annually on foreign aid with a “rising tide raises all boats” logic: If Brazil then Bangladesh then Benin climb aboard the global growth juggernaut, we’ll all be better off, so the argument went. And that growth would mean less hunger and disease, less communism (or extremism), and more commodities and consumers.
While during the Cold War some of that foreign assistance went to unsavory regimes that weren’t making their people better off, most aid went to the efforts to grow more food, vaccinate children, and build roads and schools that have had a profound effect on human development, drastically lowering preventable child deaths, illiteracy, and extreme poverty. Of course, these international efforts to tackle extreme poverty were accompanied by significant national reforms, most notably in China, where strong domestic policy and globalization have improved living standards for billions of people.
Seeing these impacts, the accepted rationale for aid grew stronger still. After all, helping the poorest is morally right, it helps the global economy and creates incentives for stability, and it works. And so, the U.S. and U.K. governments and philanthropic organizations such as the Rockefeller, Ford, and Gates foundations, as well as development nongovernmental organizations such as Oxfam and Save the Children, helped create both a policy framework and public support for development assistance. In turn, this created a momentum whereby more countries gave as they became better off—making the aid more effective and more accountable.
There have always been detractors of aid overall, but mostly on the political extremes. Their arguments usually rest on the idea that all aid is lost to corruption or the popular fallacy that foreign aid represents something like 25 percent of the budget (rather than the actual 1 to 2 percent). Others, like the economist William Easterly, argue that aid could be integral to development but is usually so badly done that it’s not worth doing.
Seeing a growing base of evidence, successive U.S. and U.K. governments, Democrat after Republican, Conservative after Labour, boosted their foreign aid budgets. No soft-headed liberal paean, the “compassionate conservatism” of U.S. President George W. Bush led to one of the largest-ever commitments of aid to fight AIDS, and Conservative U.K. Prime Minister David Cameron continued to follow the lead set by his Labour predecessors in increasing the British aid budget to 0.7 percent of GDP.
In 2015, the world reached perhaps the zenith of global multilateralism when the largest-ever gathering of heads of state came together to agree to the U.N. Sustainable Development Goals—a list of 17 global goals and 169 targets (aimed to be achieved by 2030) set by the U.N. General Assembly covering a wide range of social and economic development issues. This was followed by the Paris climate agreement that December, setting out the most ambitious development and environmental goals in history.
The gap between global policy and national politics by the time the Sustainable Development Goals were agreed on in 2015 was painfully wide and has only grown wider since. Wage stagnation, deindustrialization, and the hollowing-out of the middle class in the United States and Europe played out alongside this story, hidden in plain view, over recent decades. Even as many of the world’s poorest were gaining a foothold and the world’s richest were capturing the lion’s share of the gains in the burgeoning global economy, the middle class in the United States and Europe was losing ground.
Meanwhile, in other parts of the world, a different backlash was brewing. After a long period of rising freedoms and falling violence, a so-called democratic recession began. Moscow invaded Georgia then Crimea, the Arab Spring collapsed, and the effects of the Syrian war spilled across the Middle East and Europe.
As migration became a crisis for Europe, Myanmar’s miraculous opening and South Sudan’s birth both descended into genocidal frenzies, and social media was weaponized against the truth. According to Larry Diamond at Stanford University, “the number of democracies essentially held steady or expanded every year from 1975 until 2007.” Since then, not only has the number and quality of democracies declined, but dozens of governments have colluded to restrict space for civil society groups, suppress freedom of the press and internet, tamper with elections (their own and others’) and jail or murder political opponents.
U.S. and British foreign policy—with aid as a key component—must respond with an alternative vision that has the support of citizens, serious strategy and resources, and the prospect of making an impact.
First, leaders must be forceful at home and abroad in pursuing economic justice and confronting corrosive inequality. The basic premise of strong economies must be that they include everyone, promote fairness (higher wages and progressive taxation), and promote sustainability. There should be a social floor in every society—a level beneath which governments do not allow their citizens to fall. Concretely, that means decreasing unemployment, bringing labor (especially women’s) into the formal economy, and supporting the development of safety nets, which provide resilience in the event of future economic shocks, including robots and droughts. It means helping countries build fair and effective tax systems, so they can mobilize their own resources and strengthen the social contract. It also means international trade agreements that seek to benefit, rather than bypass, struggling communities.
With higher wages and good conditions for labor, clean supply chains, and crackdowns on tax havens and profit-shifting, international trade can continue to create growth that benefits workers, consumers, and investors. Such equitable growth at home and abroad will serve U.S. and U.K. workers, not undercut them.
Aid must therefore focus on helping to create inclusive economies in low-income countries. An economy that provides decent work and legitimate opportunity for investment is a magnet for talent rather than creating brain drain and capital flight, thereby reducing key motivations behind economic migration over time.
It would be morally intolerable and economically self-defeating to try to reduce migration by simply condemning populations to perpetual poverty. While rising wealth may indeed provide greater means for some to migrate, developing safe, stable, and prosperous countries can reduce the motivation behind many of today’s migration flows. The private sector can and must be a critical partner on this agenda—not as a recipient of corporate welfare but as investor, employer, and innovator.
Second, the British and U.S. governments must fortify a new freedom and accountability agenda to rival the heady days after the end of the Cold War. The tide of kleptocratic authoritarianism from Moscow to Caracas to Manila is creating a global competition not just of power, but of ideology. Battle lines are being drawn. Russia’s Vladimir Putin has declared that “the liberal idea has become obsolete,” and Hungary’s Viktor Orban has declared a path for “illiberal democracy” in Europe
Kleptocracy free-riding on international trade, banking, and communications systems and the rise of a “rival” model of authoritarian state-led growth are threats to the foundations of liberal democracy. China’s growth is a marvel that has managed to lift hundreds of millions of people out of poverty, causing many counties to look to Beijing as a model and genuine alternative to liberal, democratic, free-market principles.
Yet those principles still matter. The rule of law, respect for basic rights, and the inclusion of minorities, political opposition, and free media into a dynamic polity still have much to offer. History has shown that autocracies are brittle, and citizens with access to information and resources will not remain quiescent about the denial of their basic freedoms, especially during inevitable economic downturns.
To combat the type of fragility that leads to conflict and impoverishment from Syria to Venezuela to Sudan, American and British leaders must unapologetically support democratic allies and prevent backsliding from the norms of rule of law, basic rights, and good governance. Similarly, regions of Central America and North Africa cannot devolve unfettered into prison camps and free-fire zones where the grim prospect of drowning or internment while seeking a better life in Europe or the United States seem better options than building a life at home. These places are immune to quick fixes, but longer-term investment in social accountability, access to justice, press freedom, and land rights has helped to transform conflicts from Colombia to Kenya.
Britain and the United States should also take legislative action to ensure that OECD countries are part of the solution to corruption, not part of the problem. These include delivering a beneficial ownership register for U.K. overseas territories, like the Cayman Islands, to help ensure that dirty money cannot be laundered into or through the U.K. financial system, and strengthening regimes against tactics like profit-shifting that allow corporations to exploit the dark gaps in the international system to evade paying hundreds of billions of dollars in taxes.
Third, the only hope of avoiding climate disaster in this century will be policies that support the great transitions needed in energy, agriculture, and transport in developed economies—and in emerging ones as well. It was the carbon-intensive technologies invented in the countries that industrialized first in the 19th and early 20th centuries that created a climate crisis for all countries. Consequently, those countries that profited most, together with newly emerging industrial powers like China, must now invest in and share new technologies to tackle that crisis on a global scale. Poverty-reduction and climate goals must be made coherent if the food, energy, and water needs of a still-growing population are to remain within planetary boundaries.
Fourth, Western governments and their publics must see foreign aid as a source for impact and innovation rather than simply an expression of charity. Many of the most creative approaches to things like mobile payments, digital identity, off grid-energy, and elections monitoring are coming from places where international public investment has teamed up with the local private sector and civil society.
For example, recent advances to stop illegal fishing and forced labor on fishing boats have used satellites, drones, and other remote sensing tools to identify ships engaging in illegal behavior like keeping their crews at sea, often involuntarily. But deep and persistent digital divides mean that many millions of people globally—for example, women and those in rural areas—are currently unable to gain access to the opportunities digital technologies provide and risk being left behind.
Finally, Africa will be the continent where foreign assistance has the potential to play the most significant role in the next few decades. Africa will be the epicenter of both opportunity and unique challenges. Africa’s population is set to double to 2.4 billion between 2015 and 2050, creating a youth bulge of historic proportions—nearly a billion people under 25 years old. At present, over 10 million Africans join the labor force each year, but there are fewer than 4 million jobs created annually across the continent.
A youth bulge can do wondrous things for an economy, but youth unemployment can also be a leading cause of rising extremism and migration. The sort of mass job-creating growth from manufacturing that created the Asian tigers in the 1950s and 1960s may not be available to nascent African lions due to automation, wage stagnation outside Africa, and underwhelming domestic demand. So, investment in African human capital and sustainable energy and transport infrastructure will be critical to enabling an inclusive, green growth path that can take advantage of emerging economic opportunity in services, agriculture, construction, and more.
At the same time, the potential for severe negative impacts from climate change, conflict, corruption, and epidemics remains especially high. According to Freedom House, only 12 percent of people in Sub-Saharan Africa live in countries considered to be free, and rule of law scores have dropped 20 percent in the last 13 years. There are bright spots—the political opening in Ethiopia accompanies a rapid reduction in extreme poverty and a peace agreement after 20 years of conflict with Eritrea, and South Africa’s Commission of Inquiry on State Capture is forcing a much needed accountability reckoning. But far too many people across the continent continue to live under authoritarian leaders.
The continent’s ability to overcome these deep structural challenges will require strong local leadership and global cooperation. It will not prosper by becoming a neocolonial battleground for great power competition, as John Bolton, Trump’s national security advisor, suggested in launching the United States’ new Africa strategy last year, when he said “the predatory practices pursued by China and Russia stunt economic growth in Africa, threaten the financial independence of African nations, inhibit opportunities for U.S. investment, interfere with U.S. military operations, and pose a significant threat to U.S. national security interests.”
The problems facing the world today are orders of magnitude larger than what even massively increased aid budgets could solve. And fixing hard problems in hard places means the risk of failure is high. When leaders know that a refugee crisis, pandemic, or food shortage can roil geopolitics for years, they must be prepared to take risks and invest in prevention and in containing crises before they metastasize.
Rather than promising the moon and delivering incremental change, political leaders must have the courage to cast foreign assistance as vital to national interests. This is not because it wins wars or tames Chinese ambition in Africa, but because it delivers peace, prosperity, and a cleaner planet—all of which are vital to the long-term success and security of Britain and the United States.
J Alexander Thier, the founder of Triple Helix, was the executive director of the Overseas Development Institute in London and was USAID’s chief of policy, planning, and learning from 2013 to 2015. He is writing in a personal capacity. Twitter: @Thieristan