Wednesday, May 30, 2012

Three quarters of world poor live in low aid countries

In an interesting twist to the debate on focus of aid, Jonathan Glennie of the ODI argues that three-quarters of world poor live in low aid countries.

The note finds that a large majority of poor people (around three quarters) live in Very Low Aid or Low Aid Countries (VLACs and LACs) – defined respectively as countries that receive less than 1% and 2% of their GNI in aid (Glennie and Prizzon, 2012) – and have done for at least two decades. This is a story not of change but of continuity: most poor people have long lived in countries which receive very little aid.

It is therefore wrong to suggest that there are now more poor people living in non-aid dependent countries; if anything the data presented here implies the opposite. While the total number of income poor in the world has declined, the proportion of poor people living in High Aid Countries (HACs), where aid is over 10% of GNI, has in fact increased in the past 20 years, from 10% to 15%.

These findings should not be taken to suggest that aid has been unimportant in development, even in countries where it has been relatively low as a proportion of GNI. But they do imply that further thinking is required about the role and purpose of aid in different contexts. If aid is not a significant proportion of the overall economy, and hasn’t been for decades, then what role is it playing, can that role be enhanced, and what other actions might be more important to support poverty reduction than giving aid?