The magical 0.7 percent

The blog of Laurence Haddad, director of the UK-based Institute of Development Studies, pointed us towards the just-released manifestos of Britain’s Conservative and Labour parties. Both manifestos declare their intention to codify into law the development target of 0.7 percent of national income allocated to aid. From the Tories:

A new Conservative government will be fully committed to achieving, by 2013, the UN target of spending 0.7 per cent of national income as aid…We will legislate in the first session of a new Parliament to lock in this level of spending for every year from 2013.

The Labour Party:

We remain committed to spending 0.7 per cent of national income on aid from 2013, and we will enshrine this commitment in law early in the next Parliament.

While such a bipartisan commitment to ensure consistency of development funding is something the US could only aspire to, perhaps it is time for a word of caution on the origins and relevance of that target for our friends across the Atlantic, courtesy of Michael Clemens and Todd Moss:

First, the 0.7% target was calculated using a series of assumptions that are no longer true, and justified by a model that is no longer considered credible…. Second, we document the fact that, despite frequent misinterpretation of UN documents, no government ever agreed in a UN forum to actually reach 0.7%—though many pledged to move toward it. Third, we argue that aid as a fraction of rich country income does not constitute a meaningful metric for the adequacy of aid flows. It would be far better to estimate aid needs by starting on the recipient side with a meaningful model of how aid affects development.

The 2007 paper, Ghost of 0.7%: Origins and Relevance of the International Aid Target (ungated version here), gives a fascinating historical look into the machinery of global development cooperation, showing how the target came to be, and how promoting such a nonsensical target could be harmful. Their summary concludes:

The 0.7% target began life as a lobbying tool, and stretching it to become a functional target for real aid budgets across all donors is to exalt it beyond reason. That no longer makes any sense, if it ever did.