Why doesn’t untying aid work?
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Transcript of Why doesn’t untying aid work?
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Why doesn’t untying aid work?
Edward J Clay(with Matthew Geddes and Luisa Natali)
IDS-Sussex Development Lecture10th February 2010
Full OECD Study: “Untying Aid: is it working?” available at:
http://www.oecd.org/dataoecd/51/35/44375975.pdf
Contacts: [email protected], [email protected]
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Outline of talk
• Wider awareness of the tying of aid• The OECD studies – it’s the politics silly!• What do we mean? Definitions• A historical perspective – ‘path dependency’ and
‘context specifics’• OECD studies: formal and informal tying practices• Why is untying not working?• What is to be done?
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THE THREE OECD REPORTS
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OECD Definitions of Tying Status
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Developing country perspectives:
Untying is seen by governments, civil society and academics as:
• An issue of ownership; • Aid alignment with their priorities; and • Providing opportunities to local companies and
organisations to compete successfully for aid funded contracts.
THEY ARE LESS WORRIED ABOUT COMPETITION BETWEEN DONOR COUNTRY EXPORTERS
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AID: development and humanitarian grants and concessional flows
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Formal Untying: a success story?
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Who is still tying? And who is not reporting?
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TYING: DOES IT MATTER?
• Tied Food Aid efficiency costs were at least 30% or $800 million in 2002
• OECD study found local competitive sourcing using NCB or ICB to be cost-effective in most cases
• Caution - widespread view that ICT leads to oligopoly
• ISSUE OF LEVEL PLAYING FIELD
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WHERE DO WE GO FROM HERE?
• RECOMMENDATIONS ON MAKING UNTYING WORK BETTER
• RECOGNISE A MORE COMPLEX WORLD - DAC ODA IS ONLY 2/3RDS OF “AID FLOWS”- PHILANTHROPIC AID UNREGULATED AND NON-TRANSPARENT- MANY WINDOWS OF MULTILATERAL FINANCE- EMERGING ECONOMIES- NEW AGENDA OF CLIMATE CHANGE MITIGATION AND ADAPTATION
• A CLEARER DISTINCTION BETWEEN DEVELOPMENT AND HUMANITARIAN AID AND DEVELOPMENT INVESTMENT WITH GREATER TRANSPARENCY, COMPETITION RULES AND MAXIMISING FUNDING FOR NEW CHALLENGES
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AND WE WOULD WELCOME YOUR VIEWS!
THANK YOU!