Why give aid to countries with space programmes?

The British government’s Department for International Development’s (DFID) aid budget for the next five years, released last week, has received predictable criticism from a xenophobic rightwing press. While the outrage that foreigners should be getting more money at a time of domestic budget cuts was to be expected, the focus has narrowed on India’s position as an aid recipient. The argument is that a country with nuclear arms, a space programme, more billionaires than Britain and a growth rate approaching 10% doesn’t need or deserve British aid. Stephen Glover’s article in the Daily Mail is fairly typical of the kind of the concerns raised.

The argument that India is too rich to need British aid is either disingenuous or incredibly stupid. Glover claims it is likely “there is an outdated sense that it is our duty to disburse funds to the supposedly less fortunate — rather like an impoverished parent continuing to subsidise children who have grown much wealthier, and are more than capable of getting by on their own” (I’m going to be charitable and assume that Glover doesn’t mean that the notion of helping the actually less fortunate – as opposed to the merely ‘supposedly’ less fortunate – is outdated). Yet India’s growth rate is clearly from a relatively low base: if my income of £10 000 is growing at 10% per year, and your £100 000 income is stagnating, it’s still going to be a long time before my income catches yours (25 years if my maths is correct).

Glover makes a lot of the fact that “According to one measure used by the World Bank, in 2009 India was the fourth- largest economy in the world, significantly bigger than the United Kingdom, which was in sixth place”. I can’t be bothered to go check where he gets this from, but in terms of 2009 GDP, the World Bank has India in 11th place, comfortably behind the UK. Even if the two economies are of comparable size, India’s wealth is shared between a population over twenty times that of Britain’s. Accounting for the size of each country by using the more relevant index of GDP per capita, most measures have India outside the world’s hundred wealthiest nations. Glover does acknowledge this, but continuing to refer to the country as the “fourth- largest economy in the world” hardly presses this point.

More interesting, though, is the apparent claim that since “Arguably India should be spending less on defence, and nothing on its space programme, and be diverting more funds to the alleviation of poverty”, it should not receive British aid. I think this is a serious challenge to those who favour giving aid to India, and as such needs to be addressed. The best I can come up with is this analogy:

Suppose you see your poverty-stricken neighbour’s children going about undernourished and badly clothed. You have the means and the will to help them, and so resolve to buy them some clothes and food. However, you notice that your neighbour, despite struggling to look after the kids, is still paying for a satellite TV subscription. Should you still offer the aid?

There are a number of relevant considerations here. Obviously there is a need for sensitivity. You wouldn’t want to embarrass your neighbour or make them feel inadequate. But suppose you know they would be grateful. Most people would disapprove of the decision to maintain the TV subscription. But surely it would be unfair to penalise the children for the irresponsibility of their parents.

We might believe that if the neighbour doesn’t receive help they will be so embarrassed by the state of their children that they will cancel the subscription. If this is the case, then we are not actually doing the children any favours by giving them the gifts. Rather, their parents will continue to keep up their satellite subscription with the money they would otherwise have been shamed into spending on their kids. In effect, we are paying for the satellite subscription.

In development parlance, this is the problem of fungibility: even if aid is targeted directly at the poor, it may simply allow the government to divert the money they would otherwise have spent on the poor to other projects, like a space programme. Fungibility seems to me to be the only argument against giving the aid, either to the TV watching family, or to the Indian government.

I’m sceptical as to whether fungibility genuinely is a problem in this case, as it suggests there is a minimum threshold of poverty relief that the Indian government is motivated to supply, and that if this is met, however it is met, they do not care about poverty any longer. Given the uncertainty, I suspect it is best to just take the risk.

An objection to this analogy is that India is a democracy. Its citizens aren’t therefore ruled in the same way as children are by their parents. The situation is more like an impoverished group of adults communally agreeing to put satellite TV above nourishing food. We should therefore respect their decisions. As Glover says, “the country is a democracy, and its government will be held to account for the decisions it makes. It is hardly our business if India wants to spend so much money on a space programme”. Even if this were so, there would still be a case for paternalistic intervention.

However, this seems to take the mandate conception of democracy too literally. This view implies that either by voting for a government proposing a certain set of policies or by having the ability to eject a government whose policies they disapprove of, an electorate consents and is responsible for all that government does. This is simplistic at the best of times, given the lack of choice, vagaries of electoral mechanisms, absence of full information, and profusion of cross-cutting issues. In this case it implies something absurd: that the Indian people, so many of whom are desperately poor, given the choice between reducing poverty and starting a space programme, opted for the latter.

Admittedly, this isn’t Glover’s view – he acknowledges that the government’s choice may well be out of step with popular opinion. Hence his emphasis on the government being held ‘accountable’. Perhaps I’m missing something, but I don’t understand why this is an argument against giving aid to India. It could take the same form as the ‘mandate’ argument, which his talk of ‘India’ as a unified actor deciding to pursue a space programme implies. Or it could be the claim that British aid could lead to the Indian government not being held accountable for its decisions. I don’t see how this follows. Surely the Indian people will see that the money spent on a space programme could have been directed towards poverty relief, and cast their votes accordingly, independent of what DFID does. If the suggestion is that DFID will do so well in fighting Indian poverty that the space programme will then seem reasonable, that is clearly preposterous.

I’m not sure if this deals with all the problems of giving aid to India, but I think it might be a helpful way of thinking about the problem.