#07 transition
Alison Evans

Aid Effectiveness: What For?

The question of what works in aid and development has been the stuff of heated discussions for decades. While the pro and anti-aid debates roll on, look deeper and what we see is a radically changing landscape of development and the contribution that aid can make to it.

Ensuring that aid makes a difference to the right people in the right places is a long standing concern of politicians and practitioners. So much so that it has become something of an industry in itself. This piece looks at the genesis of international attention to aid effectiveness and where the agenda is headed today following agreements reached at the most recent high level meeting in Busan, South Korea at the end of 2011. While the overall assessment is quietly positive, there are also reasons to be cautious and curious about what the future holds for aid effectiveness.

Looking back: calls for global action

The first of the aid effectiveness meetings was the High Level Forum on Aid Effectiveness in Rome in 2003, when 50 or so representatives from official OECD donors, the Organisation of Economic Cooperation and Development, agreed upon some key activities to improve aid harmonization. Two years later, 300 delegates, including some from NGOs, met in Paris to sign up for a broader set of principles and targets for improving aid effectiveness known as the Paris Declaration on Aid Effectiveness.

In Accra in 2008, 800 delegates from official aid donors, NGOs and an expanding group of country partners and new actors met to review progress and press for stronger action on delivering on the Paris targets in the form of the Accra Agenda for Action. Most recently in late 2011, over 3,000 delegates from official aid donors, partner countries, new and emerging donor countries, NGOs, foundations and private sector organisations converged In Busan, South Korea to review progress on implementing the Paris principles and ask 'what next?'

Bigger and more dynamic than ever before

For those of us who have been inside the aid bubble for some time, the most striking thing about the Busan gathering was just how much bigger that bubble has become. With many new actors and the increasing self-confidence of low and lower middle-income countries and emerging donor countries, it is clear that the 'aid space' is both bigger and more dynamic than ever before.

That such a broad spectrum of actors were able to agree the details of the Busan outcome document was considered a triumph for inclusive politics. This may indeed be right. In a context in which so many of the old contours of aid have changed, there is no way that Busan could have been considered a success if it hadn't built on the participation of a much broader range of actors than previous meetings.

But the price of expanded global reach is that the tightly worded consensus from previous high level fora has (rightly or wrongly) given way to a much broader set of understandings of what constitutes effective development cooperation and partnership. The Busan outcome document is littered with references to new forms of South-South and triangular cooperation relating to modalities of aid that emphasise, first and foremost, the sharing of knowledge and experience between countries that have faced similar development challenges.

Even the title of the outcome document – the Busan Partnership for Effective Development Cooperation – denotes an important shift in language from aid effectiveness to development effectiveness. Where this takes us is still not entirely clear. In Busan, I found myself remarking that while I was firmly convinced that we had come to the end of one era, an era in which the rules of the game were drawn almost exclusively by a self-selected club of donors and partners, I was not at all clear on what defined the new era we had stepped into.

Stepping into a new era – the Busan achievements

Detailing the next steps post-Busan is still very much a work in progress, but before considering them, it's worth reflecting on three significant achievements delivered in Busan.

The first is the agreement on the New Deal for Fragile States. This relates to a group of 19 fragile and affected countries known as the G7+. They have been working with donors to ensure that aid effectiveness principles are in line with the core challenges of peace-building and state-building. In the months leading up to Busan this agenda gained momentum and at Busan itself signatories to the outcome document also endorsed the New Deal for International Engagement in Fragile States. This was no minor feat. It underscores the fact that as the world changes, the needs of different client groups change too – and conversations about aid also need to adapt.

The second outcome, no less important, is the progress made on aid transparency. Since Accra and the launching of the International Aid Transparency Initiative (IATI), transparency has shifted from the outer reaches of debates about aid to its very core. With Canada and the USA announcing in Busan that they would sign up to the IATI, this means it now covers around 75% of official aid. There is still some way to go, but this is a significant achievement nevertheless.

What is particularly interesting about this achievement is that it was heavily driven by a coalition of interest that spanned official aid actors such as the UK, Sweden and the World Bank as well as civil society organisations such as Publish What You Fund and aidinfo. As some commentators have noted, it is these voluntary coalitions that have demonstrated an ability to deliver change. And, looking ahead, they may offer alternative models for improving effectiveness rather than the 'command and control' approach that came to define aspects of the Paris Declaration.

The third and final achievement was the enhanced focus on the country-level as the most important unit of account in development cooperation. This has figured in all the outcome documents to date but has ultimately been swamped by the effort put into monitoring global targets and indicators. The Busan agreement refocuses attention on country-level compacts and monitoring supported by a (supposedly) lighter and leaner global monitoring system.

Inclusiveness wins, but implementation might be harder than anyone thought

Achievements aside, looking ahead there are a number of post-Busan challenges for the international community.

The first challenge is getting the Global Partnership for Effective Development Cooperation (GPDE) to work in practice. The Busan outcome document commits to bringing to an end to the Working Party on Aid Effectiveness (WP-EFF) which, as a sub-committee of the OECD's Development Assistance Committee (DAC), has provided a critical home for the Paris-Accra agenda since 2005/6. During its life, the WP-EFF has evolved into a sprawling network of task teams and meetings with an expanding group of stakeholders. But its strong identification with the interests of official DAC donors and its Byzantine working structure has also left it struggling to keep pace with changes in the world of development cooperation. In its place the Busan document proposes the new Global Partnership with broad and inclusive membership and high level political engagement supported by a joint DAC-UNDP secretariat.

The significance of such a partnership is two-fold: it formally expands the range of donor actors who will be 'inside the tent' on discussions about effectiveness and, more controversially, it allows for differential levels of commitment and engagement for donors entering the tent for the first time. For Paris hardliners, this was one concession too many. For pragmatists, it was the only way to ensure that more rather than fewer partners signed up to Busan. In the end there was an inevitable trade-off that needed to be managed between an inclusive partnership on the one hand, and a consensus that would bind the hands of all donor actors on the other. Inclusiveness won out.

Just how the GPDE will come into being is now the subject of intense dialogue in and around the WP-EFF. There are many requirements. The first is much needed high-level political engagement in an area – aid effectiveness – in which it has often been hard to get serious commitment from senior politicians. The second is to define a clear mandate for the GPDE that complements and does not duplicate other relevant inter-governmental platforms – the G20 for instance. The third challenge is to define a set of core functions for the partnership that expresses the spirit of Busan while keeping attention focused on the unfinished business of Paris-Accra and the New Deal.

Finally, the development landscape is shifting constantly and with several potentially game-changing international policy processes already underway – climate change, sustainable development and post-2015 – the GPDE has to assert its relevance as quickly possible. The creation of a joint DAC-UNDP secretariat to service the GPDE is a first step towards aligning these mega-policy processes. The next step is ensuring that the political agenda of the GPDE views more effective development cooperation (not just aid) as critical to achieving game-changing results in the rest of the development system.

There's an opportunity to create more bite: the role of monitoring

The second major post-Busan challenge relates to monitoring – who does it, how much of it should there be and how is success defined?

The number of partner countries who participated in the 2011 monitoring survey surpassed expectations, signalling, amongst other things, an increasing sense of use-value from those most affected by a poorly functioning aid system. Nevertheless, monitoring remains controversial. Particularly civil society organisations and partners have argued that the DAC-run monitoring system has focused too heavily on the global level to the detriment of the country level – where the information really matters. This is in tune with the focus on country-level compacts and the need to ensure that aid-recipients are the ones ultimately empowered to distinguish between more and less effective development cooperation.

But to be credible, a greater focus on country-level monitoring has to mean higher levels of openness and transparency – in the way that partner countries mobilise, allocate and manage resources for development. This is not an entirely new 'ask' of partner countries but comes with some additional bite: discussions of mutual accountability morph into discussions about extreme transparency and accountability. They tackle the need for monitoring to hold donors to account to their taxpayers and help recipient governments be accountable to their own citizens.

There have already been some successes here under the auspices of the Open Government Partnership. But such a move marks a potential step change in the way partner countries and donors do business – with high levels of transparency expected on both sides – that may not be entirely comfortable for all GPDE members.

"Because the world is changing": from aid effectiveness to development effectiveness The final area of challenge for post-Busan aid architecture is the shift in discourse from aid to development effectiveness. Whereas aid effectiveness is only about aid-related policies and programmes, development effectiveness also includes relevant non-aid policies like trade, investment and climate finance. It puts a stronger focus on development outcomes irrespective of whether aid finance has played a role.

This shift makes sense in a world that includes so many different development actors. It is also in accord with the shift made by some donor agencies some time ago towards greater policy coherence for development. In practical terms, however, development effectiveness remains a challenge for donors and partner countries alike. Typically they prefer to focus the agenda on what aid is or is not delivering rather than on the more complex metrics of development effectiveness.

Nevertheless the GPDE is going to have to commit itself to a broader vision of effectiveness if it is to chart a new era for development cooperation and one in which aid plays a declining role. The point was made well by former UK Prime Minister Tony Blair at a side-event during the Busan meeting. When asked about the future of aid and African development he noted the importance of a broader agenda, not because "aid isn't working, but because the world is changing".

Where post-Busan discussions go from here will very much depend on a new configuration of leaders in development cooperation who believe that some collective action on development effectiveness is better than none at all. Put against a background of weakening multilateral cooperation and shifting geopolitical power, achieving this may be harder than anyone thought.

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