Want to end global poverty? End the global welfare state

British aid money is being used to prop up dictators and deny basic property rights to the worlds poorest individuals.

Earlier this year a supposedly Conservative government enshrined in law a binding commitment to spend 0.7 percent GDP – currently around £12 billion – on foreign aid (largely because the UN says this is a good thing).

Apart from the so-called ‘Tory right’ there is no serious dissent in Parliament against this line. Both Labour and the Tories support it. So do the Liberal Democrats, but they don’t really matter any more.

Meanwhile the armed forces have been hacked to the bone, leaving them woefully ill prepared for action in Syria. Britain is committed to spending the NATO minimum of 2 percent GDP on defence, but only achieves this through creative accounting.

The UK’s foreign aid budget is notoriously wasteful. The British government currently gives money directly to 131 foreign governments instead of focusing spending on those who need it most. This ‘bilateral’ spending makes up 60 percent of the aid budget. The rest goes to ‘multilateral’ agencies, for example through the UN.

£200 million is spent on countries defined as ‘upper middle income’. £371 million is lost paying ‘administrative costs’. We hand over £1 billion in aid money to the EU Commission – whose own accountants won’t sign off their accounts.

India is the second biggest recipient of British aid money, which goes to fund private firms and technological assistance. They can afford a space programme but apparently need our money to keep their own people from starving. Which makes absolutely no sense whatsoever.

But non-emergency foreign aid is not just a waste of money. It actively hurts the people it is supposed to be helping: the poor in Africa and the rest of the developing world.

The economist William Easterly argues that “benevolent autocrats”, political leaders of countries receiving aid, gain international legitimacy from co-operation with aid agencies and foreign governments. Those autocrats are further empowered to keep riding roughshod over the rights of their own people.

Take the example of Ethiopia, the biggest single recipient of UK aid money. Britain and America spent billions on international development in Ethiopia in the early 21st century, at a time when the Ethiopian government was busily engaged in shooting, jailing, starving and seizing the property of opposition supporters.

British aid money has also been used to make payments to convicted terrorists. The Palestinian Authority receives £80 million from British taxpayers, money it promptly pays to terror convicts rotting in Israeli prisons.

Global poverty has declined dramatically over the last several decades due to the spread of free markets and free trade. Countries that have pursued aggressive pro-market reforms – privatising industry, cutting taxes, eliminating corruption and respecting private property rights – have benefited the most from the triumph of capitalism.

Neoliberalism works, basically.

Yet governments in developed countries are splashing the cash on programmes that actively hinder the spread of capitalism and individual rights.

Corrupt governments are propped up by foreign cash. Those governments ignore the rule of law, seize private property and treat entire nations like their personal tribal kingdoms. Foreign investment is put off and economic growth suffers. The people hurt most by this are the poor.

In other words, it’s just like the welfare state – but on a global scale.

The developed Western world – Britain, Europe and the United States – became rich when government was much smaller, and respect for political and economic rights far greater. People in the developing world have the right to enjoy the same freedoms we do. To assert anything else is utter hypocrisy.

I should take this moment to note that I am not against emergency aid. Helping people displaced by war, natural disasters and terrorism is both right and moral. But development aid to foreign governments is a curse dressed up as a blessing.

The Department for International Development should be scrapped entirely. It has been allowed to waste our money on harmful foreign vanity projects for far too long. The entirely arbitrary 0.7% spending commitment should go with it.

All foreign aid projects that are not a direct response to an emergency should be ended. Emergency aid would be better handled by our more-than-capable armed forces, who should be properly funded and equipped.

We should not waste money on propping up regimes that undermine the prosperity of their own people by trampling over private property and free markets. Those regimes should be allowed to fail – just as bad banks should be allowed to fail.

If we are ever to get serious about ending global poverty, then we need to stop dealing with corrupt governments that do not respect property rights. Instead of engaging in futile virtue-signalling to show that we ‘care’, we should do something useful.

It’s well past time we dismantled the global welfare state.


Chris has been a member of the Conservative Party since 2010. He believes strongly in individual freedom, personal responsibility, and the power of free markets to eliminate poverty by encouraging wealth creation. Follow him on Twitter: @cjmanby1989

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The views expressed in this article are that of the author and do not necessarily reflect the views of Conservatives for Liberty

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