Canada’s longest election campaign in over a century has been dominated by rhetoric surrounding Canada’s fragile economy, Justin Trudeau’s hair, and how Thomas Mulcair is making promises without explaining how to pay for them. Each party’s stance on the topic of foreign development aid has been barely debated, and no one is certain what shape Canadian aid programs will take in the aftermath of the election. But while it is probably time for Mr. Harper to depart 24 Sussex, his government’s approach to foreign aid should stay.
To date, the Harper government has not met the United Nations’ recommended foreign aid budget for OECD countries— set at 0.7% of GDP (a whopping 12.5 billion USD per year in Canada’s case). Instead, foreign aid spending under the Harper government has dropped to its lowest levels in years: around 0.27% of GDP last year. Given Canada’s extensive public debt and bevy of domestic development issues that need attention, $4.5 billion in taxpayer’s dollars is a reasonable amount.
For the likes of Paul Krugman and his facsimiles, $8 billion in added spending per year might seem like a tiny sum relative to the government’s entire budget. But in 1994, a spending cut of $14 billion was the difference between Canada remaining sovereign in its affairs or being forced to accept aid from the International Monetary Fund. Canada may be a rich nation, but like even the richest household, it cannot consistently spend beyond its means.
Nor can it afford to use money ineffectively. The exorbitant sums we spend on foreign aid often fail to reach those who need it most. Recently, Jordan, Canada’s middle-eastern ally, has failed to receive its much anticipated cash to assist with the recent influx of Syrian refugees.
Where developmental aid is competently delivered, the effects of bags of cash entering poor economies are often counter-intuitive. When Canadians call on their government to hand out more money to help the world’s poor, they should know that often the money hurts, rather than helps those said to be in absolute poverty. In her book The Idealist: Jeffrey Sachs and the Quest to End Poverty, Nina Munk offers some horrifying inconvenient truths about developmental aid in action. People in small rural African villages are often forced to grow cash crops and spices that never reach the world market or risk losing funding from wealthy benefactors who make token, staged appearances in remote villages.
Developmental aid can also get outright violent. In 2011, 20 000 farmers in Mubende, Uganda were driven out by force of arms to make way for a World Bank sponsored clean-air project. Farms, families, and lives were torn and mangled thanks in part to funding from developmental aid budgets— yet many still look towards development aid as the silver bullet that will end poverty. Looks like saving the world and its air isn’t all moonlight and roses after all.
Nevertheless, according to the New Democrats, the Liberals, the Bloc Québecois, and the Green Party, the answer to a faster end to poverty is still to more than double Canada’s developmental aid output. Merely spending more does not guarantee better results, as evidenced by the United States’ spending on healthcare. This is especially true when it comes to developmental aid. Funds must be precisely targeted, monitored, and assessed. The Conservatives have got it right with their selective and respectable developmental investments in maternal and child health.
Torn between competing desires to shrink government, invest in the economy and help the world’s poor, Canada has little room for additional aid spending. But Canada is well-placed to help in other, arguably more meaningful ways. For one, we share similar governmental institutions with many of the poorest countries of the world via our shared Commonwealth heritage. Sending Canadian judges to countries rife with corruption can serve to strengthen institutions like the rule of law and judicial independence. Similarly investing in security, healthcare, and other pillars of civil society through managed exchanges could better serve the end of poverty— as opposed to the graveyard of failed and mismanaged projects and the avalanche of unaccountable cash that seems to be the unfortunate trademark of developmental aid.
These institutions have been shown by scholars like James Robinson, Daron Acemoglu, and Rafael La Porta to improve long-term growth outcomes over time. Rather than funneling money through large and ultimately ineffective UN development programs at the world’s poor as if they’re token victims in a Christian Children’s Fund commercial, instead, let us begin to give them what they need to help themselves: our liberal institutions and the foundations for civil society.