Adam Smith Institute

G8 meetings follow a predictable pattern. In the months beforehand, campaigners call for more aid to Africa to fight diseases of poverty such as malaria. G8 leaders make grandiose speeches, commit billions of their citizens’ money, which then pours into the coffers of African governments. The health of Africans stubbornly remains poor. Campaigners accuse the G8 of not giving enough, and so on.

The foreign aid situation is becoming increasingly farcical. As William Easterly, author of The White Man’s Burden put it: “The status quo — large international bureaucracies giving aid to large national government bureaucracies — is not getting money to the poor.” As Prof Easterly intimates, the failure stems from the insistence of OECD government donors to give the lion share of aid directly to governments, who they then rely on to plan, manage and deliver healthcare.

The brutal truth is that most health ministries are not up to the job. They have almost no data to tell them if their work is effective and are riddled with corruption.

Donors, meanwhile, judge their own effectiveness by ‘input’ factors such as the number of bednets or drugs distributed, but they often have no information about whether or not health is improving as a result of their activities.

It’s time to scrap this system which is doing little for patients, other than enriching people lucky enough to have jobs in ministries. 

We could, for instance, insist that all British aid is henceforth spent on output-based competitive contracts for delivering healthcare, open to profit and non-profit groups alike. Where this has been tried, as in Cambodia, it’s been an immense success, and is particularly useful for getting services to groups that have been neglected by government provision, such as the rural poor.

The obvious advantage is that if the contract-holder does not deliver results, they don’t get paid.

DfID is currently moving in the opposite direction, increasing the amounts it pays to subsidise general government healthcare. Its blind optimism is rather touching, were it not taxpayers’ money being wasted.

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