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How well does aid for development work? And could it do better?

Gill Miller

Department of Geography and Development Studies

University of Chester

How well does aid for development work? And could it do better?

Aid architecture

Changing aid environment

Challenges of delivering aid

How could it be better?

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Basic premise is the moral case for aid

• Extreme poverty and human suffering

• Enormous wealth inequalities

• Widening gap between rich and poor

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Basic premise is the moral case for aid

• Extreme poverty and human suffering

• Enormous wealth inequalities

• Widening gap between rich and poor

“Donors could adopt three different approaches to providing

information about aid:

1. Try to convince the public that some aid does indeed work.

2. Try to convince the public that steps are being taken to enhance

the impact of aid by trying to reduce the number of cases where it

does not work well.

3. Try to nurture, extend and deepen support for aid, acknowledging

that a significant part of it is clearly ineffective, and sharing

knowledge about aid’s failures as well as successes.” Riddell 2007

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Aid ... a complex business

Donors NGOs Recipients

... it’s big business

2009 US$150 bill / yr. 33% to Africa

Donors are changing...

> 200 Bilateral & multilateral organisations channelling ODA

Public-private partnerships

Some countries have > 40 donors

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Aid architecture• 95% aid from DAC countries (Donor Assistance Committee of the

OECD)

• New players – China, India, Brasil, Korea.

- motives? Especially in Africa

No grand plan......

Purpose of aid agencies – to mediate between donor interest groups

& recipient interest groups. Need for this because limited

information / trust / accountability between different sides i.e.

donors and recipients

7Source: The Times 13.01.2010

Who delivers aid?

How much?

What for?

8Source: The Times 13.01.2010

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Aid architecture

Aid arena is increasingly crowded:

• > 150 multilateral agencies (UN, global, regional, IFIs)

30% of aid

• > 33 bilateral agencies, members of DAC / OECD + at

least 10 bilateral non-DAC donors. 70% of aid

• New ‘independent’ institutions eg Millennium Challenge

Corporation, Global Fund to fight Aids, Malaria & TB,

PEPFAR, Gates Foundation

10Source: Burall and Maxwell, ODI 278, 2006

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Changing aid environment – new pressures

• Value for money, recession, donor contributions under

pressure

• Accountability

• Increased ownership by country nationals

• Despite all the experience, still barriers between western

and local cultural attitudes

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Challenges for agencies to make aid work: national issues

Overcome ‘weak institutions trap’: (Nancy Birdsall)

• landlocked, dependence on primary commodities, corruption, conflict,

lack of middle class

Moral hazard

• Aid may protect incompetent governments. Is there an incentive to

remain poor?

• Lack of political will

• Aid may cause economic stagnation

• Perceived alliance of agencies with governments

• Diversion of skilled workforce into donor / aid agency community

Challenges for agencies to make aid work: cultural issues

• Donors / agencies in a hurry

• Urban bias, tarmac bias, dry season bias

• Gender –

o hard to contact women in some recipient countries

o as women gain power, men lose it

• Partnerships

• Reaching the ’hard to reach’.

• In-country expertise13

Could aid work better?

• Consensus e.g. OCHA

• Agreed international strategic vision

• Increased transparency of NGOs

• Sustainability – when aid projects leave, who pays &

maintains?

• Learn from experience – reports v practitioners

• Need to be creative / new technologies

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Could aid work better?

• Logical step is for NGOs to do what they are good at – core purpose National scale – advocacy Local scale – grassroots capacity building

• Let other mechanisms work in other areas

e.g. a role for businesses – TNCs and SMEs

• This may demand collaboration, trust, building

cooperation

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Paris Declaration March 2005(Rome 2003, Accra 2008, Busan 2011)

Aims:

• to improve harmonisation between donors, countries, organisations

• to improve alignment and management of aid

• To be specific about what is to be achieved and when

• To increase the impact of aid

12 indicators to monitor progress in achieving the partnership

commitments 5 broad areas: ownership, alignment, harmonisation, managing for

results, mutual accountability

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Accra Agenda for Action September 2008

• Broader country-level policy dialogue – consistency with other issues

• Improving institutions / capacity development

• Donors to commit to using country systems, not their own

• Reduce fragmentation. Too much duplication

• Donor respect for country priorities

• Increase aid’s value for money. Un-tie aid; local procurement

• Encourage South-South cooperation

• Non-interference in internal affairs

• Improve transparency

• Accept adaptation of aid to meet country circumstances

• Increase medium-term predictability of aid

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What does it take to make development effective?

• Partnership between donors and

recipient countries

• Accountability on both side

• Strengthen national devel strategies

• Focus on recipient/ partner priorities

• Avoid duplicating effort – rationalise

donor activities

• Reform donor policies to focus on

collaboration

• Agree measures to assess

performance / accountability

• Make aid flows more predictable /

timely

• Delegate more responsibility to

field staff

• Integrate global programmes into

recipient countries

• Improve transparency of dealings

to reduce corruption

What has aid effectiveness achieved?2008 Monitoring Survey on the Paris Declaration

http://www.oecd.org/document/0/0,3746,en_2649_3236398_41203264_1_1_1_1,00.html

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Strong progress Moderate progress Weak progress

Untying aid Improving the quality of public financial management systems Improving the quality of technical assistance 

Recording aid in country budgets Reducing the number of parallel implementation units (PIUs) Improving the predictability of aid 

Improving the quality of countries' national development plans Improving donors' use of countries' financial management and procurement systems Co-ordination of donor field visits and studies Creation of frameworks to monitor and account for results 

Conclusions: How well does aid for development work? And could it do better?

Yes – there is progress but... importance of

• Political will – on all sides

• Appreciating complexities

• Cooperation, coordination, collaboration

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References

• Bebbington, A., Hickey, S. And Mitlin, D. Can NGOs make a

difference? Zed books

• Birdsall, N. (2007) Do No Harm: Aid, Weak Institutions and the Missing

Middle in Africa, Development Policy Review, 25(5), p575-598

• Browne, S. (2006) Aid and influence. Earthscan

• Manor, J. (ed) (2007) Aid that works: successful development in fragile

states. World Bank

• Moyo, D. (2009) Dead Aid. Penguin

• Riddell, R. (2007) Does foreign aid really work? OUP

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