Research undertaken by ActionAid in 2005 shows that official aid figures make the world’s richest countries appear three times more generous than they really are.

ActionAid calculated that only one third of aid was 'real' aid, targeted at reducing poverty. The remaining two thirds is 'phantom' aid which does not fight poverty.

The least generous countries also have the least enlightened aid policies. Only 10 cents of every dollar of US aid is 'real' aid. The UK, with 71% 'real' aid, is the G7’s best performer. But Luxembourg, Norway and Denmark, none of them G7 members, give far more aid relative to their wealth, and a high proportion of it – 81% in Luxembourg’s case – is 'real'.

Researchers worked with ActionAid offices in Cambodia, Ethiopia, Uganda and Vietnam to observe how aid is spent. In Cambodia, they found that the cost of 740 international advisors was $50-70 million, almost as much as the wage bill for the country’s entire civil service of 160,000 people. But there were also examples of 'real' aid working for poor people. Well-coordinated aid helped Uganda to increase primary school enrolment by five million.