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1. Levels of development aid
1.1. Total amounts of development aid given to poor countries, by type of aid
1.2. Total amounts of development aid given to poor countries, in percent of GDP
1.3. Biggest donor countries, in absolute amounts and in percent of GDP
1.4. Main beneficiaries
1.5. Aid dependence, aid as a percentage of beneficiaries’ GDP
1.6. A special type of aid: remittances
1.7. A special type of aid: private charity
2. Human Development Index
3. Foreign debt and debt relief
4. Aid and democracy
Development assistance steadily increased from $58 billion in 2000 to a $128 billion in 2010 and $133 billion in 2011. However, this still falls far short of what the developed world promised, and what many believe poor countries need if their citizens are to escape poverty. Also, adjusted for inflation, the total for 2011 is actually lower than the total for 2010:
These numbers are below what the developed world promised, and also below what could reasonably be expected from wealthy countries. For example, UK aid spending per person per day is less than the price of a cup of coffee (source). However, one should add that the fight against poverty isn’t just a matter of amounts of development aid. Fostering economic growth is perhaps just as important.
A more up-to-date version:
The total amount of international development aid is now more than $100 billion a year. In 2008, rich countries gave $119.8 billion in foreign aid. Over the years, between 0.2 and 0.3% of GDP has gone to aid. This is considerably below the United Nations target of 0.7%. The number in 2011 was 0.31%. Since the 1960s, the share of aid in GNI (a proxy of GDP) has sagged from about 0.5% of GNI to about 0.25-0.30% of GNI.
Some more recent figures:
(source, “DAC” is the Development Assistance Committee)
(source, click image to enlarge)
Data for 2011:
The main beneficiaries of aid are, no surprise there, in Africa. Between 2000 and 2008, aid flows to sub-Saharan Africa increased from $12bn to $36bn per year.
The following chart shows total development aid flows from all donors to “Least Developed Countries” (or LDC), or those countries who have a human development index (or HDI) of less than 0.5, using constant 2007 US dollars, on a per capita basis (per capita of receiving countries):
Here’s a somewhat silly yet telling graph showing US development aid by destination country:
Some countries in Africa depend heavily on aid. The contribution of aid to their GDP is of such an extent that the countries would collapse were the aid to stop:
An often overlooked aspect of aid is worker remittances. This is money send back home by nationals working abroad, mostly to families and friends. As seen from the following graph, this kind of informal aid has become even more important than the formal, government sponsored or international development aid:
More on remittances here.
US development aid, expressed as a proportion of GDP, is relatively low compared to that of other countries (see this post). But donations from individuals, private organizations and businesses are very high, dwarfing those of other rich nations. This is the result of a culture of philanthropy and charity and of a generous tax regime:
The HDI combines measures of life expectancy, literacy, educational attainment, and GDP per capita for countries, so only 4 of several possible development measures, which is why some have called the HDI a “crude” measurement. The index was developed in 1990 by Mahbub ul Haq, Sir Richard Jolly, Gustav Ranis and Lord Meghnad Desai, and is used to rank countries by level of “human development”, from 0 – least developed – to 1 – most developed.
The following 2 maps show the HDI in 2002 and 2007:
This graph shows the different levels of progress by continent:
However, the HDI isn’t an ideal measure:
[B]y pitching the education component of the HDI at a very low level (literacy and gross enrollment) which has an upper bound, as more and more countries attain near 100 percent literacy and 100 percent gross enrollment of the young the education component ceases to contribute to progress in the HDI.
For countries above the low educational thresholds this implies that more progress in education (e.g. expanding tertiary enrollment, improving quality of learning outcomes in primary school) does not raise the HDI while increases in GDP per capita do raise the HDI. (source. source)
Debt relief is a form of indirect development aid:
This paper discusses the so-called “aid curse“: just as dependence on natural resources has a negative effect on the quality of a country’s governance and democracy (a phenomenon called the resource curse), so has international development aid (or official development aid, ODA), especially in countries which depend heavily on aid (and in which aid represents a large percentage of GDP).
This is surprising, because one of the aims of international development aid is to bolster the quality of governance, directly through aid targeted at this objective, or indirectly on the assumption that better education, health care etc. will ultimately lead to better governance.
It seems now that there is a correlation (and perhaps even a causal link) between high levels of aid and low levels of democracy. The explanation is that foreign aid , like the revenue of natural resources, provides an opportunity for governments and leaders to appropriate funds illegitimately. And, because they benefit from aid, they will try to exclude other groups from power. This obviously destroys democratic institutions or makes it more difficult to establish them.
Foreign aid also reduces the need for a system of taxation. And without such a system, it’s a lot more difficult to construct a well-functioning government, and it’s less likely that forces for representation take root (historically, the principle of “no taxation without representation” has promoted democracy). When a government doesn’t depend on taxes for its revenues, then it will have less incentives to seek accountability.
These graphs from the paper show how the levels of democracy in countries decrease while the levels of aid (as official development aid – ODA - over GDP) increase: