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The Paris Declaration on Aid Effectiveness: A Title Befitting its Illusions

October 10, 2011

In 2005, over 100 donors and developing countries committed to make aid more effective when they agreed to the Paris Declaration on Aid Effectiveness. A distinguishing feature of the Declaration was the commitment to hold each other to account for implementing its principles at the country level through a set of clear indicators, with targets to be achieved by 2010. The final report, Aid-Effectiveness 2005-2010, draws on the results of the 2011 survey and on similar surveys undertaken in 2006 and 2008. A total of 78 countries volunteered to participate in the final round, which took place in 2010.

The Declaration had 12 targets.  Among them: reliable procurement systems; aid flows aligned with national priorities; untied aid; countries having a national development strategy; country ownership; and Target #4, a strengthen capacity for coordinated support, e.g., coordinated programs consistent with national development strategies.

On September 22, the Brookings Institution held a public session to report on Aid Effectiveness 2005-2010: Progress in Implementing the Paris Declaration. J. Brian Atwood, Chair of the OECD Development Assistance Committee, presented the findings. He commented: “the results are sobering. At the global level, only one of the 12 targets established for 2010—co-ordinated technical cooperation (a measure to the extent donors co-ordinate their efforts to support countries’ capacity development objectives)—has been met, albeit by a narrow margin.” None of the targets measured private aid, nor did any of them have a measurement for transaction costs, e.g., the cost of moving money from a donor to a developing country.

In a companion paper provided by the Brookings, “the dismal results” were interpreted in two ways. In one, “the Declaration put forward a bureaucratic solution to a problem that is largely political. Secondly, the way the targets were conceived hinges on recipient governments assuming a leadership role in driving greater aid effectiveness at a country level, which many have been unable to do.” (See It’s Complicated: the Challenge of Implementing the Paris Declaration on Aid Effectiveness, Brookings, mimeo, no date.)

The next stop in this process is the forthcoming “Measuring for Success at the Busan (South Korea) High Level Forum on Aid Effectiveness” in late November. In a separate paper, J. Brian Atwood commented: “developing countries are driving the agenda and are active and essential parties to the process. They have high expectations that their development partners will do more than just bow to their demands. They want better better co-operation, ownership of their own development agendas, and alignment of resources with their strategies.” (See The Road to Busan, J. Brian Atwood) These sentiments are proper in today’s context … but do the words match our actions?! The U. S. Government’s largest international health program is the Global Health Initiative (GHI), now well into its third year of operation. It is also the world’s largest health effort undertaken to date, funded at some $63 billion over a six year period.

“Healing the World”, by GlobalPost, examines country ownership within GHI. The news service writes on September 23rd that Rwandan Health Minister Agnes Binagwaho told GlobalPost that a GHI focus on gender-based violence was a “curious” decision, which “she said wasn’t a priority and no one had asked her if that fit in with the national plan.” GHI is based on a “whole of government approach” to development. Yet, of the 27 U. S. agencies that can be involved, only four participate with USAID/State (CDC, HHS, Department of Agriculture, and NIH). In a recent USAID $40 million health planning grant to Kenya, it had to be divided with two different health agencies: the Ministry of Health and the Ministry of Medical Services) because of dual political party governance.

On transaction costs, most people believe that when donors contribute $5 billion to international health aid, then that is the amount which actually reaches a patient population. Paul Collier, an economist at Oxford University, tracked donor money released by the Ministry of Finance in Chad. The funds were designated for rural health clinics. His survey had the extremely modest purpose in finding out how much of the money actually reached the clinics—not whether the clinics spent it well. Amazingly, he wrote, “less than 1 percent reached the clinics—99 percent failed to reach its destination.” (See Paul Collier, The Bottom Billion, Oxford University Press, 2007)

The Aid Effectiveness 2005-2010 report is Soooooo 20th Century by its total absence of any resource flows from the private sector. In 2009, Hudson Institute recorded a U. S. Total Net Economic Engagement of $226.2 billion to the developing world. This sum included ODA and contributions from corporations, PVOs, religious organizations, etc.; it is larger than ODA from all other OECD countries combined ($120 billion).  Of the U. S. amount, 13% represented ODA. In 2004, ODA was at 20% of all U. S. resource flows. (See The Index of Global Philanthropy & Remittances, 2011, Hudson Institute)

Yet, it is not just U. S. private resource flows that the OECD/DAC fails to record, but also those from other developed nations. For instance, total U. K. private giving through charities working in overseas aid and famine relief amounted to $6.3 billion in 2008 (latest available data). The U. K. government, however, reported only $329 million in private giving to the OECD. (See Index, 2011)

The OECD/DAC should be congratulated for its forthright assessment of aid effectiveness. This “dismal” record, assiduously surveyed over a five year period, may well be attributed to the fact that … ODA-sponsored aid can’t be measured, or that what’s out there isn’t measureable in terms of effectiveness. The report states that “aid for the government sector is not captured systematically in country budgets.” (see Report)

We are on the road to Busan with an objective of establishing a new global compact to drive effectiveness improvements.  An encouraging aspect of the Busan meeting is that it will explore “the different circumstances under which aid today is delivery.” If that includes private giving, then policy-makers will be addressing reality rather than the illusion that the fault for these “sobering results” on the Paris Declaration lies in the stars and not in ourselves.

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One Comment leave one →
  1. October 10, 2011 9:05 pm

    It is still a pressure point for donors to reform and perform. But there’s no “carrot” or “stick” approach in it. In the end, donors remain the same.

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