75 PIVOTAL PUBLIC POLICIES: THE 0.7% TARGET

After international aid flows to poorer countries increased steadily in the quarter century following the Second World War, in 1970 the United Nations General Assembly adopted a target for development assistance from advanced economies to rise to 0.7% of GDP. This money would be separate from assistance provided to deal with humanitarian crises.

 

 

The target continues to put pressure on policymakers in these countries to do more for their poorer counterparts, though over the years the target has all too rarely been achieved. In 1974, Sweden became the first of only six countries ever to hit the target—the others are the Netherlands, Norway, Denmark, Finland and Luxembourg. Since 1970, the weighted average of development assistance across the the 23 member countries of the Development Assistance Committee (DAC) of the Organisation for Economic Cooperation and Development has never exceeded 0.4% of their combined GDP.

 

 

The DAC is responsible for most international development aid, nonetheless. Around 80-85% of the money comes from governments, the rest from private sources. In 2019, the total assistance from DAC members reached $153bn, led by the US, UK and Germany. Yet a non-member of DAC, China, donated $38bn, exceeding America’s $34.6bn.

 


There has been growing debate in recent years about the effectiveness of much of this development aid, too much of which has either been poorly designed or, in practice, designed to achieve the political goals of the donor country rather than to drive improvements in the quality of life for all in the recipient nations. Even so, the money has helped deliver significant benefits in some countries, especially in terms of population health and longevity. A growing share of private capital in development assistance is believed to be improving its impact, relative to traditionally government only aid.

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