Letter to the Clerk of the Committee from
Thank you very much for your letter. We were
pleased to have the opportunity to give evidence to the Committee.
I am enclosing some files I have which will
supply the additional information that you asked for. The data
needs a little explanation:
1. THE PROPORTION
We have given you the breakdown by donor for
the year 2000 ( the most recent year for which comparative figures
are available). You will notice that the USA is not included.
This is because the USA has not reported to the DAC on its tied
aid since 1996. However, the most recent OECD Aid Review of the
USA (1998) notes that the USA supported the principle of untying
aid to Least Developed Countries.
The Committee asked about possible linkages
between aid tying and aid volume.
Several donors, notably Denmark (giving over
1 per cent GNP) and Japan (the world's largest donor in volume,
currently giving 0.28 per cent GNP) have made the case that involving
domestic constituencies including the private sector in aid programming
helps to sustain public support for aid.
Denmark's Strategy for Danish
Cooperation Development Policy Towards the Year 2000
notes the importance of involving the Danish "resource base"
including the business and research communities which contribute
to the Danish development effort.
Prior to 1997, the growth in Japanese
aid was seen to have been supported by a pro-aid consensus which
involved business, bureaucrats and politicians and which explicitly
stressed the economic and political benefits accruing to Japan
as a result of aid.
But whilst the case for tying aid in order to broaden
support for aid is easy to make, there is no real evidence that
such a policy works. The UK's own experience is that in the years
which followed the 1980 decision to "give greater weight
in the allocation of our aid to political, industrial and commercial
considerations" aid fell substantially both in volume and
The conclusions that we would draw from the evidence
That government commitment has a
much greater impact on aid levels than either commercial or public
That tying aid is not a very effective
way to generate support for aid.
2. THE PROPORTION
The graph shows total humanitarian assistance
as a share of total ODA. Total humanitarian assistance is made
up of bilateral emergency and distress relief, plus multilateral
ODA to UNHCR, ECHO and UNRWA along with the relief share of multilateral
ODA to WFP.
In addition we have given you humanitarian assistance
net of the amount that is spent on refugees in the donor country.
This is quite interesting from a UK perspective. As I mentioned
at the IDC session, the UK has taken the honourable path of choosing
not to include its expenditure on refugees in Britain in their
first year of residence as part of its ODAeven though this
is a legitimate expenditure under DAC rules. When this domestic
expenditure is excluded the UK is the second-largest bilateral
donor of humanitarian assistance by a significant margin.
I have included an extract from the background
we did for DFID on voluntary flows for development. I am afraid
it is rather long, largely because there is no conclusion on the
volume of voluntary flows and it is explaining this, but just
to pull out a few of the main points:
Available data shows a range of NGO
income (including funding from governments) of $7 billion to more
than $15 billion in 1998.
UK Development NGOs had an income
of between £900 million and £1.1 billion in 1998.
Voluntary income in 1998 was in excess
of £430 million.
Development NGOs in the UK raise
a higher proportion of their total income from the public than
charities as a whole. Development NGOs raise 21 per cent of money
given by the public to charitable causes but are responsible for
only 15 per cent of total UK charitable income.
If you would like further breakdowns of this
data or other information on aid flows we would be happy to help.
|The USA, New Zealand and Ireland do not report to the DAC on tied aid.|
Published 1994. Back
See Public Attitudes and International Development Cooperation,
OECD Paris 1998. Back
See for instance British Aid and International Trade, Morrisey,
Smith & Horesh, OUP 1992, which argued that tying was not
only "at variance with free market and trade liberalisation
arguments" but that "it is far from obvious that it
generates a net economic gain". Back
Not printed. Copy placed in the Library. Back