Bill & Melinda Gates Foundation

Myth: Poor Countries Aren’t Doing Their Part to Fund Their Own Development

January 24, 2014

It’s tempting to think that development assistance – aid from the outside – is the biggest force supporting development today.  Those of us working in the field probably even reinforce that idea with our prolific evaluations and heated debates all focused on the impact of aid.

But aid is really just a drop in the bucket of resources funding development in poor countries.  More often than not, poor countries are in fact funding their own development with their own resources.

 The real question on our minds can’t be “how should aid support development” but “how should aid be used to help and encourage countries to support their own development."

Let’s take health spending as an example: this report from the Institute for Health Metrics and Evaluation (IHME) found that in Sub-Saharan Africa in 2010, governments spent $29.4 billion of their own money on health -- 3.6 times the total contributed by aid.  For the developing world as a whole, IHME says government spending was 18 times aid.

And for one of the most inspiring public health success stories of our time – the eradication of smallpox back in 1980 – the story is the same.  If you look at the numbers, as retold in the Center for Global Development’s great Millions Saved story, the ramp-up vaccination effort that eventually eradicated smallpox involved a total of $98 million from international aid and $200 million from endemic countries.

This by no means implies that aid is not important. As the smallpox story also makes clear, the vaccines, coordination, and global commitment that were essential to success were all made possible by external assistance. At its best, aid adds multiples of its value by investing in things countries simply cannot do themselves.

Still, the reality is that long-lasting development has to be – and is – driven by countries themselves both in terms of money and in terms of having the right policies and priorities.

Does this mean developing countries are doing enough?  Probably not.  The Lancet Commission on Investing in Health told us recently that low-income countries spend about 2 percent of their GDP (Gross Domestic Product) on health.  Increasing that to just 3 percent would help put countries on a path toward a “grand convergence” – universally low levels of infectious disease, maternal and child deaths.  It should be an easy sell.

Given all this we would be remiss to believe our conversations about aid are equal to conversations about financing development. We should be trying to marry the former with the latter, because the real question on our minds can’t be “how should aid support development” but “how should aid be used to help and encourage countries to support their own development."

There are many myths that block progress for the poor. But we all have the chance to create a world where extreme poverty is the exception rather than the rule, and where all children have the same chance to thrive, no matter where they’re born. Read the 2014 Gates Foundation Annual Letter, co-authored by Bill and Melinda Gates to find out more and see how you can get involved. #StoptheMyth

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