Progress in making aid more effective

Since the G20 meeting of November 2006 in Melbourne, donors renewed their commitments to increase aid effectiveness during the Accra High Level Forum in 2008. It was generally agreed that the Paris Declaration can expand development goals by strengthening cross-sectoral issues such as gender equality, respect for human rights, and environmental sustainability. Each principle of the Paris Declaration was redefined with a view to integrating these values. Concrete illustrations of the possibility of integrating these concepts and values were further shared.

Although the aid effectiveness agenda remains unchanged, indicators to measure the progress made in the field are evolving. The Accra High Level Forum 2008 set new priorities to increase aid effectiveness into the Paris Declaration’s principles which effectively means:

  • increasing development actors’ delivery capacity,
  • finding methods of including civil society in the delivery process; 
  • improving transparency and accountability on both donors and governments’ parts so as to account for the inclusion of such values;
  • adapting the evaluation and monitoring criteria accordingly.

Untying aid continues to increase. Not only was the 2001 DAC Recommendation complied with, but also in May 2008 DAC members agreed to expand the coverage of the recommendations to eight heavily indebted poor countries (HIPCs) that are not LDCs.

However, progress towards ownership seems to be uneven among partners and donors and often remains narrowly based within partner countries. National governments appear to encounter difficulties in making their strategies operational, especially when it comes to allocating budgets for specific results.

Progress made towards alignment is reflected in the gradually increasing and selective use of public financial management (PFM) and national public procurement systems (PP). In both cases, although progress is recorded, it seems to be insufficient to meet the 2010 goals. The use of PFM appears to be linked to budget support and the best results for the use of national systems of PP are found where the partner government is itself results-focused.

Harmonisation is progressing, thanks to the multiple efforts conducted by donor countries through the adoption of joint programming and assistance strategies, the pooling of funds and the use of country systems when feasible. More specifically, efforts have been seen in Tanzania, where joint assistance led to integrating a gender-focused approach to a sectoral, co-operative division of labour. Overall consensus building seems to be the key to generating more harmonisation.

Managing for results still proves difficult to implement due to the lengthy process it involves. Most partner countries are still in the midst of devising monitoring frameworks with results-oriented strategies, which are difficult to organise without help from donor countries to plan, budget, manage and account for the results of policies and programmes. For this reason, most donors provide some form of capacity building aid focusing on the particular needs of each country. In Uganda, where gender inequalities are deemed to be a major issue, the government, together with civil society and academic institutions, was helped to create budgetary incentives for local governments to focus on poor women and children. In Africa, Tanzania, Mozambique and Uganda are the countries making the most progress towards the attainment of results-oriented frameworks according to the World Bank.

Through the lessons learnt at the Accra High Level Forum, the development community realised that although the Paris Declaration improves aid effectiveness, much better delivery and monitoring are needed on the ground in order to achieve the Millennium Development Goals by 2015.

The Progress Report on implementing the Paris Declaration highlights several areas for possible improvement on the part of both partners and donors. Among these, the most striking are: leadership issues to spur the Paris Declaration’s implementation process as well as broadening the base of stakeholders involved in the process; the necessity to change the incentive structure further to encourage donors and partners; and coherence issues between aid policies and trade, migration and environment. Other areas of concern have been identified in the 2008 monitoring survey and the World Bank’s Review, Results-Based National Development Strategies: Assessment and Challenges Ahead. They point out “definitional clarity, accelerated construction of monitoring frameworks, and greater agreement on how to strengthen systems” as being essential to reach the 2010 target of reducing by one-third the proportion of countries without transparent and verifiable performance assessment frameworks.

Both the 2006 Baseline Survey and the 2008 Survey on Monitoring the Paris Declaration featured 19 African countries representing a broad spectrum of geographic, linguistic and situational differences. The Box below provides an overview of how African countries fare in improving the quality of aid vis-à-vis the global pool of countries which took part in the 2008 Survey on Monitoring the Paris Declaration.
Efforts are already underway to respond to some of these challenges. Several donors and partners have started to work on designing verifiable indicators that both could use leading up to the next high-level forum in 2011. The DAC Network on Development Evaluation is also working to improve the quality of evaluation systems by producing and distributing evaluation quality standards, glossaries and guidance.

Finally, it should be mentioned that the proliferation of aid channels has been combined with fragmented aid. ODA fragmentation can be damaging to the effectiveness of ODA, particularly in recipient countries with low institutional capacity, as it may increase the transaction costs of aid. Fragmentation is manifested in different forms, such as the number of donor-funded activities, the financial size of aid commitments and the dispersion of small-scale free-standing technical assistance as a modality (instrument) of aid delivery. The 2007 EU Code of Conduct on Complementarity and Division of Labour, for instance, links efforts to reduce aid fragmentation to enhanced donor coordination and harmonisation.