The Rise and Fall of the Department for International Development

Mark Lowcock and Ranil Dissanayake

(A version of this review was first published on the website of the Thinking and Working Politically Community of Practice)

Mark Lowcock and Ranil Dissanayake (henceforth M&R) have written a history of DFID from 1997 to the first days of the Starmer Government in 2024. They are both DFIDDepartment for International Development veterans: Mark, of course, rising to be Permanent Secretary; and Ranil as an economic adviser. Theirs is a history marked by nostalgia for the golden age after 1997 and despair, almost bitterness, about the damage done to the Department after 2016. There is also an optimistic message, however, especially about the value of aid.

The book ends with four lessons, for the UK and for other donors in international development. These are about long-term vision, building an organisation to deliver the vision, generous funding, and partnerships. Two questions then arise. Is the history right? And are the lessons the right ones to draw, for the UK and others?

A personal note

We will get to those, but first a personal note to provide context for what follows. I have been at this a long time: as an economist on a UK aid project in Bolivia in the 1970s, as a founder member of the Independent Group on British Aid, which launched the poverty-focused concept of Real Aid in 1982; as an unofficial and occasional advisor to ministers and shadow ministers from the mid-1990s; as Director of ODIOverseas Development Institute (London) from 1997 to 2009; as Specialist Adviser to the International Development Committee of the House of Commons from 2011-2017; and, of course, as someone with a research interest in the topic.

The argument

Anyway, the book. There are four chronological sections, covering: (a) the Clare Short years from 1997-2003; (b) the remaining Labour years to 2010; (c) the coalition years to 2015 and through to 2016; and (d) ‘The Fall’, 2016 to the present day. The history is interspersed throughout with discussion of and data on development trends (which I’m afraid I skipped). What do we learn?

Part I covers the decision to create DFID, the strengthening of the Department, various aid and non-aid initiatives, and, especially, the role Clare Short and her team played in embedding the Millennium Development Goals, in the UK and internationally. The last chapter in the section offers a verdict on the Clare Short years: ‘The capability, reputation, culture and effectiveness of the department . . . strengthened substantially in these years’. Clare Short’s leadership did not quite achieve this on her own – Tony Blair and Gordon Brown are allowed a part – but if ‘the most important test of leaders is what is retained from what they did years after the have moved on’, then this period is considered by M&R to be a testament to effective leadership.

Part II describes DFID’s growing concern for conflict, state fragility, insecurity, corruption and governance. It notes the growing budget, lists a series of administrative reforms, and celebrates the level of decentralization, which gave DFIDDepartment for International Development country managers more leeway than most aid counterparts. A key feature during this period is the growth of cross-party consensus on aid. And of course, these were the years of the Africa Commission, of pressure for debt relief, of Make Poverty History, and of the Gleneagles Summit. Importantly, development survived as a UK priority during the financial crisis from 2008: this alone justifies a positive score-card at the end of the decade.

Part III covers the Coalition years and the Conservative Government up to the Brexit vote in 2016. The development problem was ‘getting more complicated’: climate change was growing in importance, and humanitarian relief, linked both to environmental crises and conflict, was absorbing an ever-larger share of the budget. Cameron himself led global work to design the ultimately over-loaded Sustainable Development Goals as the successors to the MDGs, and during this time, 0.7 became law. But Andrew Mitchell (Secretary of State from 2010-12) and his successors noted that support for development spending was shallow, and invested in value-for-money, a focus on results and independent evaluation of aid impact. This, M&R conclude, ‘failed to head off the right-wing critics. They were technical and evidentiary responses to what was ultimately a political problem’.

Part IV covers a period of ‘chaos . . . political turmoil and policy confusion’. M&R lament the erosion of the commitment to poverty by successive ministers from 2016 onwards. ‘To the extent’, they say, ‘that (the political leadership of DFID) had any policy agenda at all on development, the Government’s narrative focused in an increasingly transactional way on a few issues – especially health, education, humanitarian response, and help for women and girls’. There was also ‘a deluded desire to pretend that Britain mattered more, and had greater influence on the world stage, than it did’. And then, of course, in 2019, DFIDDepartment for International Development was merged with the Foreign Office to create the Foreign, Commonwealth and Development Office (FCDO), and aid was cut from 0.7 to 0.5 percent of GDP. In subsequent years, there were increasingly severe cuts to the aid budget: ‘Ministers presided over the destruction of much of DFID’s capability to manage development policy and programming, and a tarnishing of the UK’s international reputation’. Oh, dear.

To the lessons. As noted, there are four. First, a long-term vision, backed up with clear objectives and a persuasive theory of change: the MDGsMillennium Development Goals offered this, the SDGs did not. Second, building an organization to deliver the vision, distinguished by strong leadership, a coherent culture, effective systems and processes, and of course good people. Third, generous resourcing. And fourth, strong partnerships, across Whitehall and internationally.

Is the history right?

So, is the history right? The book covers a lot of ground and is based on many interviews. It offers a passionate, evidence-based and welcome defence of development cooperation.

There is one regret, which is that M&R do not seem to have interviewed any of the Advisers or SPADs who worked for ministers or shadow ministers during the period. David Mepham would have been a particularly valuable source, given his experience with Clare Short and her predecessors before 1997: sadly, David died in 2018. One anecdote of his, though, is that he had to rewrite the opening chapter of the 1997 White Paper pretty well from scratch, because the civil servants didn’t get it. I wish we could ask him to say more about that. The many others who served deserve recognition. One of them, Stephen Doughty, is now a Minister himself.

There is an immense amount of detail in the book, which recalls debates which energized us as researchers at different stages. Can poverty reasonably be defined in money terms? How can donor countries be held accountable for the quality of their partnership with poor countries? Is budget support a good idea? Does aid actually work? Is the focus on results the rabbit hole it often appears to be? What can be done in fragile states? There is also a discussion to have over drinks one day about how different ministers and senior civil servants are ranked.

Let me just make a few points.

First, yes, DFIDDepartment for International Development was excellent in the 2000s, but I am not convinced that was mainly the result of creating a new Department. Clare Short asked me to write her a paper before the 1997 election on whether a separate Department was a good idea.  Annoyingly, I can’t find it. But I concluded that there were arguments on both sides, and that the decision was a bit of a toss-up. Clare said that the big advantage of being a Cabinet Minister was that she would be able to button-hole Gordon Brown while waiting to go into Cabinet or while sitting next to him on the front bench in the House of Commons. There was also an argument that you would have a better minister if they were in the Cabinet. That is a theory some would say has been tested in recent years.

People from other countries often asked me about the UK model. I would reply that, compared with other countries, usually with fragmented aid and development architectures, even the predecessor Overseas Development Administration (ODA)  offered advantages compared to other systems: responsibility for aid policy as well as implementation; for development aid as well as humanitarian aid; for both financial and technical assistance; and with strong engagement with the Bretton Woods institutions and other multilaterals.

What is the DFIDDepartment for International Development counterfactual? It is worth asking what the UK development offer would have been in the 2000s if ODAOverseas Development Assistance had been retained and strengthened, with Clare Short at the helm and more money to spend.

More recently, the merger has obviously created many problems, and many good people have left. On the other hand, I set nine tests for a successful merger and most of those have been met. They were:  Commit to 0.7; Retain poverty focus; Adhere to DAC rules; DFIDDepartment for International Development (= development) membership of Cabinet, NSC; Own Permanent Secretary; Own staff including 700+ professional advisers; Own Select Committee; A voice on non-aid matters; and Retain ICAI.

The big failure is 0.7, with M&R clear about the cost of cutting aid, and diverting resources to supporting refugees and asylum seekers in the UK. There should also be special stress on protecting (or perhaps now rebuilding) the professional cadres, which was/is definitely a UK comparative advantage. Whether this is done within FCDO or by returning to a dedicated Department of State, as M&R recommend, can be considered a second order question.

Second, Clare Short deserves a lot of credit for re-energising the aid programme and for pushing the MDGsMillennium Development Goals at a critical time. It is also true, as M&R note, that she was often impatient with NGOs and (some) academics. I have at least one good anecdote of my own to that effect, which caused me a great deal of anguish and some difficulty at ODI. The MDGsMillennium Development Goals were characterised by time-bound targets (e.g. halve poverty by 2015). Targets were popular in Government at the time. There was quite a push-back agains targets in the early years of the Blair Government, and the MDGs raised similar problems of oversimplification and perverse incentives. Adrian Wood, when Chief Economist at DFID, used to say that it was important to ‘take the MDGsMillennium Development Goals seriously, but not literally’. But I have said in public that Clare was right to foreground the target-based approach of the MDGs, and I may have been wrong to nit-pick. The Christmas tree SDGs are another matter . . .

It is also important, though, to give even more credit than M&R allow to Tony Blair and Gordon Brown. M&R are quite grudging about Blair, in particular. The progress made in the 2000s would not have been possible, for example at Gleneagles, without their top-level leadership focus on high-level strategy. Why, one wonders, did No 10 often describe DFIDDepartment for International Development as the ‘big NGONon-governmental organisation down the road’? Why did one Permanent Secretary once complain that there were not enough good people in DFIDDepartment for International Development to send around Whitehall? And why did one DFIDDepartment for International Development minister (Labour) lament that DFIDDepartment for International Development had too much body and not enough brain?

Third, M&R are sceptical about what they describe as the ‘toothless’ act to legislate for 0.7. I’m not sure about that, but maybe that is just because I was one of those advocating for it. It reflected a long debate through the 2000s and later about how to protect the level of aid. The commitment to 0.7 played an important part in the effort to build a cross-party consensus: indeed the commitment became a competitive issue between the parties. Yes, the commitment was abandoned when it became politically unpalatable – but the least that can be said is that having the commitment in place raised the embarrassment threshold when it was abandoned.

Fourth, the book has quite a lot to say about non-aid issues, but arguably not enough. From the perspective of 2024, it is possible to make the case that non-aid issues are much more important than aid (with the exception of humanitarian relief and climate finance, the latter of which is thought by many not to count as aid at all). But the IGBA Report ‘Aid is Not Enough’ was published in 1984, and of course many worked on trade, finance, peace-building, migration and other non-aid issues both before and after. By the early 2000s, Inge Kaul’s book on Global Public Goods (published in 1999, not referenced in M&R), had helped reshape the development debate. By the middle of the decade, I was writing about the different development cooperation needs of the 20% Club, who were aid dependent, and the 0.2% Club, who were not.  A decade later, the International Development Committee wrote a major report on Beyond Aid; and climate change worked its way to the top of the agenda (finally), with Rory Stewart describing the issue as a ‘cataclysm’ that had to be front and centre in development work. Here is a conclusion for M&R: a test of the effectiveness of a development agency is how well if shapes national policy on non-aid issues.

Fifth, the importance of multilateralism is hinted at but not fully explored – in terms of aid spending and also policy. M&R note in their chapter on the 2000s that ‘multilateral agencies are often effective but rarely efficient’ and mention but do not discuss Andrew Mitchell’s Multilateral Aid Review. They do not analyse the reasons or consequences of the deep cultural affinity between senior DFIDDepartment for International Development officials and the World Bank, often the default recipient of DFIDDepartment for International Development resources. The EUEuropean Union deserves a chapter of its own in a history of DFID, and so do efforts to improve the performance of the UN. The materials in my cupboard are eloquent on both.  I was writing in the mid-2000s about the competences required in DFIDDepartment for International Development to deal with the multilaterals (‘Spyglass, Spigot, Spoon or Spanner’) – and by the way, multilateralism was a major theme of the Douglas Alexander White Paper in 2009, which I worked on and about which M&R are dismissive. For example, it committed to put a higher proportion of new resources into multilateral agencies, to support reform.

Finally, I do think it is important to recognize that DFID, wonderful as it was etc . . .etc . . . before the fall, was also sometimes seen as over-reaching itself. The DAC Peer Review of the UK in 2014 had many positive things to say about DFID, but it also made the point, politely, that DFIDDepartment for International Development was gummed up by targets, procedures and transactions costs, and had become (my words not theirs) a bit of a global bully.  Thus, with respect to humanitarian aid, ‘there is a fine line between ensuring UK priorities are implemented, and listening to, and respecting, the positions of others on the global stage.’ And ‘the UK needs to manage the risk that its focus on reporting to domestic audiences weakens its engagement on mutual accountability’.

Lessons for the future

How about the lessons for the future? In thinking about these, I reflect on the above, but also on two recent books: Tony Blair on Leadership, and Failed State, by Sam Freedman. The former reinforces the M&R point about vision and leadership, has a chapter on the ‘Supreme Importance of Strategy’, and another on delivery, which has a nuanced treatment of targets, recognizing some errors in the Labour Government’s first term, from 1997.  The latter picks up a number of points made in M&R, not least the negative impact of a high turnover of ministers. Just four points.

First, a key conclusion, not entirely dependent on the institutional configuration, but closely linked to it, is that aid matters and mostly works. Aid matters because of need. As the G20 communique concluded just this week: ‘With only six years left to achieve the Sustainable Development Goals (SDGs) of the 2030 Agenda, progress towards only 17% of the SDG targets is on track, nearly half are showing minimal or moderate progress, and progress on over one third has stalled or even regressed.’ Aid also mostly works. It is not the only answer to faltering progress, and attribution is sometimes difficult, but M&R make the case convincingly that cutting aid hinders development. In this context, it goes without saying that diverting aid destined for developing countries to pay for the first-year costs of housing refugees and asylum seekers, in the UK and elsewhere, has strongly negative consequences. The total cost of this in 2023 was $US 29 bn, with 11 out of 28 DACDevelopment Assistance Committee (of the OECD) members allocating more than 15% of ‘aid’ in this way.

Second, the conversation about what ‘development’ means today is not over. The framing of Andrew Mitchell’s 2023 White Paper was pretty good. Remember it had seven over-arching themes:

• Going further, faster to mobilise international finance to end extreme poverty, tackle climate change and biodiversity loss, power sustainable growth and increase private sector investment in development;
• Strengthening and reforming the international system to improve action on trade, tax, debt, tackling dirty money and corruption, and delivering on global challenges like health, climate, nature and energy transition;
• Harnessing innovation and new technologies, science and research for the greatest and most cost-effective development impact;
• Ensuring opportunities for all, putting women and girls centre stage and investing in education and health systems that societies want;
• Championing action to address state fragility, and anticipate and prevent conflict, humanitarian crises, climate disasters and threats to global health;
• Building resilience and enabling adaptation for those affected by conflict, disasters and climate change, strengthening food security, social protection, disaster risk financing and building state capability;
• Standing up for our values, for open inclusive societies, for women and girls, and preventing roll-back of rights.

The White Paper was less good on the implementation side. As I commented at the time: ‘The White Paper . . .  does a pretty good job of diagnosis and with respect to a guiding policy. There are lots – lots – of actions, presumably coherent. What is not clear to me, though, is what choices have been made. . . . There are lots of 'we wills', which is fine, but I would love to see a list of 'we won'ts'.’

Which Government globally has done better? And will the new Labour Government feel the need to produce its own White Paper?

Third, it goes without saying that the world order is exceptionally fragile, with consequences that range across development preoccupations, from conflict to trade, from migration to climate change. In this context, development cooperation cannot just be about aid, but has to be about rebuilding the global order. Building on the lessons of collective action theory, development has to be about creating a culture of collaboration, about incentives and disincentives, and about strengthening global institutions. A tall order for the UK at least, less powerful and less well-connected than it was in 1997, and probably facing major international disruption in the coming years. Development strategy needs to start with an analysis of this question.

Fourth, then, whatever the institutional configuration, this job cannot be done by development specialists alone. The development challenge now is cross-sectoral, cross-disciplinary, cross-border, and cross-instrument. Having a development voice at the heart of international policy-making is essential. My view? An FCDO is better suited to this than a separate FCOForeign and Commonwealth Office and DFID. The priority is to make FCDO as good as it can possibly be.