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

1. How well does aid for development work? And could it do better? Gill Miller Department of Geography and Development Studies University of Chester

2. 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?

3. Basic premise is the moral case for aid • Extreme poverty and human suffering • Enormous wealth inequalities • Widening gap between rich and poor

4. 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: • Try to convince the public that some aid does indeed work. • 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. • 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

5. Aid ... a complex businessDonors 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

6. 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

7. Source: The Times 13.01.2010 Who delivers aid? How much? What for?

8. Source: The Times 13.01.2010

9. 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

10. Source: Burall and Maxwell, ODI 278, 2006

11. 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

12. 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

13. Challenges for agencies to make aid work: cultural issues • Donors / agencies in a hurry • Urban bias, tarmac bias, dry season bias • Gender – • hard to contact women in some recipient countries • as women gain power, men lose it • Partnerships • Reaching the ’hard to reach’. • In-country expertise

14. 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

15. 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

16. 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

17. 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

18. 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

19. What has aid effectiveness achieved?2008 Monitoring Survey on the Paris Declarationhttp://www.oecd.org/document/0/0,3746,en_2649_3236398_41203264_1_1_1_1,00.html

20. 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

21. 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