To genuinely support national development across the globe, what is needed is more than a new departmental structure – it is a shift of agenda.

FCDO needs strategic approach to transform the effectiveness of the UK aid budget

A new report from the Legatum Institute highlights the opportunity for the Foreign, Commonwealth, and Development Office (FCDO) to improve the efficacy and value for money of Britain’s aid budget. The Institute is urging the department to take a different approach that recognises the systems issues facing developing countries and invests over the long-term to transform the institutions that are vital to sustained prosperity.

The How Nations Succeed report, based on an in-depth examination of the journeys of 10 nations with contrasting development trajectories over six decades, sets out a comprehensive framework for national transformation and provides insights on the role of aid and its limitations.

The report demonstrates that aid has proven most effective when targeted in support of nations’ own development priorities. It notes that this is particularly effective when supporting efforts to build capacity not only in sectors such as healthcare and education but also critically in improving the quality of governance, whether the administration or the judiciary.

The Institute highlights that for aid to lead to increased prosperity around the world, it should:

  • Be focused on national development as the best available mechanism for rapidly lifting large numbers of people out of poverty.
  • Be based on long-term commitments to countries with a domestic vision of development.
  • Include technical assistance to address structural issues in recipient countries and facilitate capability transfers.

Commenting on the report’s findings, CEO of the Legatum Institute Baroness Philippa Stroud said: “Aid plays a vital role in providing immediate disaster relief and humanitarian assistance. But this should only be a small part of our ambition. Now is the time to transform the way UK aid is used to help increase prosperity around the world.

“The administration of the UK’s aid budget has been varied – from the Ministry of Overseas Development to the Foreign Office to DFID and now to the new FCDO. But to genuinely support national development across the globe, what is needed is more than a new departmental structure – it is a shift of agenda and a more strategic approach.

“The provision of aid as external assistance, offering much-needed expertise, skills, and training opportunities, can make all the difference – although ownership of decisions about the details of policy design should sit with national governments themselves.

“Our work shows that, ultimately, nations that develop, develop themselves. Leaders must be men and women of vision and character, committed to placing the long-term development of their nation above short-term political imperatives. But by developing deep partnerships with those developing countries and investing in their leaders’ visions for national transformation, the FCDO can help nations build institutional, economic, and social wellbeing and demonstrate that the UK remains a force for good in the world.”