Unpacking the International Development Strategy: making aid work with foreign policy

It’s a despairing time now, with the crisis in Ukraine and knock-on impacts to the poorest countries, alongside Covid effects which have wiped off years of development. From a UK perspective this comes alongside massive Overseas Development Assistance (ODA) cuts and challenges to long-term programming as the DFID-FCO merge plays out.

It was within this context that the UK’s International Development Strategy was published last month to a fairly predictable response. NGOs voiced concerns over the sidelining of mentions of tackling poverty, the private sector supported an integrated approach to development assistance (alongside other foreign policy tools), and most highlighted that whilst it was great to have a strategy, at times it lacked coherence on the how - for example, its focus on bilateral aid whilst supporting many global public good objectives such as health security or climate change.

A broad strategy allows for various interpretations, with concerns that the renewed focus on trade with some high-profile exits of development expertise, risks the UK development policy being increasingly subsumed by a desire to project hard power and commercial necessity, and a short-termism that can follow from such objectives. However, reading Stefan Dercon’s (a former official and adviser with FCDO) book over the recent UK bank holiday prompted some alternative thoughts on the ‘how’. Therefore, in an effort to be more positive about the world, as the UK sunshine made a rare appearance, it triggered some hope that the IDS could be compatible with Stefan’s call for understanding and working with development elites - whose decisions provide the basis for long-term development gains:

1) It accepts the limit of aid and acknowledges the role of public policy

Many groups have expressed worries over the prominence given to the private sector and commercial aims of foreign policy, but the strategy accepts the importance of the messy world of public policy to achieving growth and public service improvements. So even though it is unapologetically more business-orientated, it refocuses the debate on the importance of government and limits of aid compared to these more powerful forces for development. This implies not just working with Ministers, but as Dercon points out, the important role of technocrats from central banks, special advisors, insider elites, and so on to understand how public policy works.

Putting in the lead skills in political diplomacy – indeed accepting what we all know that all aid is political - with the nitty-gritty of how development works via public policy, under the FCDO roles of Ambassador and Development Directors, should also mean having a greater understanding of where to intervene – or as Stefan says – “who to dance the tango with (and be led by)". This is crucial as there is less money (and soon to be fewer staff) available to achieve everything outlined in the strategy, from trade to girls’ education.

2) If implemented well it will prioritise integrated thinking rather than lots of one-off investments

The new strategy risks trying to do a lot with less, but at country and programming level, the “long term, patient approach”, hints at whole-system thinking. This is important. To take two quite different areas highlighted in the strategy: the role of British International Investment (BII) and girls’ education.

The private sector will finance commercially viable projects; that is what they do. But what areas these projects are in to genuinely achieve impact and additionality that works for long-term development and not just achieve some project-level impacts, is important. There is therefore scope for a more ambitious role linking BII into this as part of a country strategy, something that has always felt missing in FCDO (previous DFID) country strategies/ diagnostics. Whilst it is unrealistic for BII to completely change its approach to its deeply honed, project-first culture, a deeper exploration of how development finance interacts with what Stefan calls ‘development bargain’ would be welcome. To do this well, you need a diagnostics tool that embraces the complexity of the system and genuine desire to explore. Our attempt at creating a ‘thicker’ (i.e. more than just understanding growth constraints) is set out here.

To take another example, when it comes to education there is a lot of focus on ‘what works’ in the IDS, which is great, and a traditional strength of UK development thinking (see below), but we know that you can’t achieve learning by a plethora of projects focussed on school building or literacy drives. Securing strengthened learning outcomes for girls means diagnosing existing education system incoherence. It takes more than money to build ‘effective education systems’ and requires an understanding of how systems evolve and the role of international actors within these.

3) A bespoke country focus

The impetus to spend around three-quarters of funding allocated at the 2021 Spending Review through country and bilateral programmes, offers hope this can actually work i.e. decisions are made in partnership at country level and tailored to specific systems.

There are clear risks to this in the strategy: The focus on British expertise may move us away from promising localisation trends seen elsewhere. Similarly, as noted above, the focus on issues such as climate change and health security are public good and global in nature and thus hard to align with the UK's focus on bilateral programming in these areas. How the UK will work with the best parts of the multilateral system and provide leadership beyond its own resources is not clear.

On the other hand, the shift to bilateral spending and a long-term view of FCDO embassies could indeed lead to a more ‘local approach’, and provide the ingredient that allows a genuine partnership to tackle these issues.

4) Emphasis on knowledge, not finance

Finally, these partnerships will be based on expertise, with a welcome focus on ‘what works’ and ‘centres of excellence’. That is not to say that levels of funding don’t matter and the cuts haven’t been devastating to the world’s poor people. However, through knowledge and expertise based on genuine demand, the UK can assert ‘soft power’, (a key pillar of the new strategy), alongside supporting the world’s poor. Having worked inside governments in Africa and elsewhere, this feels a more effective way to compete with the likes of China who will outgun the UK commercially – as it builds on the UK’s comparative advantage rather than a few isolated infrastructure projects that may do less for long-term positioning.

How can we achieve effective learning in schools? How can we develop more secure energy systems? How do we promote a greener economy through taxation? These questions all require expertise in research and innovation. One of the UK’s strengths is providing exceptional analytical capability to complex problems – take the Covid-19 vaccine development, for example. But what can set the UK apart, with its depth of UK development thinking (made up of think-tanks, NGOs, universities and consultancies), and where the IDS could be stronger, is the ability to link science and knowledge in genuine partnership with public policy actors, working to develop national evidence and innovation systems.

So in short, whilst there are many areas where clarity on the IDS would be desired, and this positive reading may prove unfounded as pressure for short-term UK interest takes over (and potentially distracts from an in-depth poverty focus), there is room for optimism. It's possible to take the view that FCDO’s aid programmes could actively embrace a politically astute and long-term view of trying to achieve impact, or “dance the tango” more explicitly.