Future of development aid
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The document discusses key takeaways on aid effectiveness, emphasizing the need for monitoring and evaluation, third-party involvement, and reducing redundancy through technology. It highlights the importance of aligning aid with recipient countries' national development strategies and improving donor coordination to enhance overall outcomes. The Monterrey Consensus and the Paris Declaration on aid effectiveness are referenced as frameworks for enhancing international development cooperation through ownership, alignment, harmonization, managing for results, and mutual accountability.
![Consensus on high-quality aid
Maximising efficiency
– allocation to poor and well-governed and country programmable
– low administrative cost
– focused/specialised and supporting select global public good facilities
– untied aid
Fostering institutions
– aid to receipients top development priorities and percentage of recipient budgets and partner
operational strategies
– no project implementation unit and coordination of technical cooperation and forward spend-ing/
aid predictability
Reducing burden
Transparency and learning
Monterrey Consensus
The Monterrey Consensus has become the major reference point for international development cooper-ation.
The document embraces six areas of Financing for Development:
1. Mobilizing domestic financial resources for development. [If this were possible on a large scale,
then external financing would become redundant. This is also what Governments do, in the large.
Governance is important.]
2. Mobilizing international resources for development: foreign direct investment (FDI) and other
private flows. [Performance has to be demonstrated in the long term of development bonds and
other named ideas.]
3. International Trade as an engine for development. [This is how the Asian Tigers leapfrogged but
this model is not the only credible development model, particularly in countries with substantial
internal markets and an expanding middle-class.]
4. Increasing international financial and technical cooperation for development. [The detail is ever
important.]
5. External Debt. [Credible, where available.]
6. Addressing systemic issues: enhancing the coherence and consistency of the international mone-tary,
financial and trading systems in support of development.
2](https://image.slidesharecdn.com/future-of-development-aid-140926022614-phpapp01/85/Future-of-development-aid-2-320.jpg)
![Paris Declaration on Aid Effectiveness, February 2005
[To a large extent, in South and South East Asia, this is already the case.]
1. Ownership: Developing countries must lead their own development policies and strategies, and
manage their own development work on the ground. This is essential if aid is to contribute to truly
sustainable development. Donors must support developing countries in building up their capacity
to exercise this kind of leadership by strengthening local expertise, institutions and management
systems. The target set by the Paris Declaration is for three-quarters of developing countries to
have their own national development strategies by 2010.
2. Alignment: Donors must line up their aid firmly behind the priorities outlined in developing coun-tries
national development strategies. Wherever possible, they must use local institutions and pro-cedures
for managing aid in order to build sustainable structures. In Paris, donors committed to
make more use of developing countries procedures for public financial management, accounting,
auditing, procurement and monitoring. Where these systems are not strong enough to manage
aid effectively, donors promised to help strengthen them. They also promised to improve the
predictability of aid, to halve the amount of aid that is not disbursed in the year for which it is
scheduled, and to continue to untie their aid from any obligation that it be spent on donor-country
goods and services.
3. Harmonisation: Donors must coordinate their development work better amongst themselves to
avoid duplication and high transaction costs for poor countries. In the Paris Declaration, they
committed to coordinate better at the country level to ease the strain on recipient governments,
for example by reducing the large numbers of duplicate field missions. They agreed on a target of
providing two-thirds of all their aid via so-called “programme-based approaches” by 2010. This
means aid is pooled in support of a particular strategy led by a recipient countrya national health
plan for examplerather than fragmented into multiple individual projects.
4. Managing for results: All parties in the aid relationship must place more focus on the result of aid,
the tangible difference it makes in poor people’s lives. They must develop better tools and systems
to measure this impact. The target set by the Paris Declaration is for a one-third reduction by 2010
in the proportion of developing countries without solid performance assessment frameworks to
measure the impact of aid.
5. Mutual accountability: Donors and developing countries must account more transparently to each
other for their use of aid funds, and to their citizens and parliaments for the impact of their aid.
The Paris Declaration says all countries must have procedures in place by 2010 to report back
openly on their development results.
3](https://image.slidesharecdn.com/future-of-development-aid-140926022614-phpapp01/85/Future-of-development-aid-3-320.jpg)
Future of development aid
- 1. Aid effectiveness September 2014 Key takeaways Good enough is good enough, if the citizenry is satisfied; out-performance can be left to private concerns who depend on it to compete, or who can deliver in partnership ME is needed but only donors want to spend significantly on it because data is dear to them and performance criteria ties up further spending; ME should be carried out by third-parties who have unrestricted access and are truly independent with significant automation being most objective Most projects are already monetarily efficient, as they are embedded in low resource settings that donors do not relate with, quality and performance are problems. Donors have a lot of experience that they do not easily share, perhaps for self-preservation as they are relatively expensive resources There is too much redundancy of effort, technology can help At scale, performance and quality suffer, so incentives and execution context have to be reassessed. Small-scale wonders are a dime a dozen No donor can match well-governed Government-backed pockets of excellence There is no development project that can be replicated blindly, the context changes and is temporal. Identifying performers suffers from selection bias People make projects happen and they age and move on. The rolling new team may not be as dedicated, committed and efficient. Reversion to the mean ensues. External agency involvement helps. The agencies need to come across as more sensitive to the fact that they are better resourced, not better field performers. 1
- 2. Consensus on high-quality aid Maximising efficiency – allocation to poor and well-governed and country programmable – low administrative cost – focused/specialised and supporting select global public good facilities – untied aid Fostering institutions – aid to receipients top development priorities and percentage of recipient budgets and partner operational strategies – no project implementation unit and coordination of technical cooperation and forward spend-ing/ aid predictability Reducing burden Transparency and learning Monterrey Consensus The Monterrey Consensus has become the major reference point for international development cooper-ation. The document embraces six areas of Financing for Development: 1. Mobilizing domestic financial resources for development. [If this were possible on a large scale, then external financing would become redundant. This is also what Governments do, in the large. Governance is important.] 2. Mobilizing international resources for development: foreign direct investment (FDI) and other private flows. [Performance has to be demonstrated in the long term of development bonds and other named ideas.] 3. International Trade as an engine for development. [This is how the Asian Tigers leapfrogged but this model is not the only credible development model, particularly in countries with substantial internal markets and an expanding middle-class.] 4. Increasing international financial and technical cooperation for development. [The detail is ever important.] 5. External Debt. [Credible, where available.] 6. Addressing systemic issues: enhancing the coherence and consistency of the international mone-tary, financial and trading systems in support of development. 2
- 3. Paris Declaration on Aid Effectiveness, February 2005 [To a large extent, in South and South East Asia, this is already the case.] 1. Ownership: Developing countries must lead their own development policies and strategies, and manage their own development work on the ground. This is essential if aid is to contribute to truly sustainable development. Donors must support developing countries in building up their capacity to exercise this kind of leadership by strengthening local expertise, institutions and management systems. The target set by the Paris Declaration is for three-quarters of developing countries to have their own national development strategies by 2010. 2. Alignment: Donors must line up their aid firmly behind the priorities outlined in developing coun-tries national development strategies. Wherever possible, they must use local institutions and pro-cedures for managing aid in order to build sustainable structures. In Paris, donors committed to make more use of developing countries procedures for public financial management, accounting, auditing, procurement and monitoring. Where these systems are not strong enough to manage aid effectively, donors promised to help strengthen them. They also promised to improve the predictability of aid, to halve the amount of aid that is not disbursed in the year for which it is scheduled, and to continue to untie their aid from any obligation that it be spent on donor-country goods and services. 3. Harmonisation: Donors must coordinate their development work better amongst themselves to avoid duplication and high transaction costs for poor countries. In the Paris Declaration, they committed to coordinate better at the country level to ease the strain on recipient governments, for example by reducing the large numbers of duplicate field missions. They agreed on a target of providing two-thirds of all their aid via so-called “programme-based approaches” by 2010. This means aid is pooled in support of a particular strategy led by a recipient countrya national health plan for examplerather than fragmented into multiple individual projects. 4. Managing for results: All parties in the aid relationship must place more focus on the result of aid, the tangible difference it makes in poor people’s lives. They must develop better tools and systems to measure this impact. The target set by the Paris Declaration is for a one-third reduction by 2010 in the proportion of developing countries without solid performance assessment frameworks to measure the impact of aid. 5. Mutual accountability: Donors and developing countries must account more transparently to each other for their use of aid funds, and to their citizens and parliaments for the impact of their aid. The Paris Declaration says all countries must have procedures in place by 2010 to report back openly on their development results. 3