With traditional donors locked in economic stagnation, scant progress being recorded on the targets set for donors in the Paris Declaration, and the main providers of South-South co-operation set on maintaining freedom of action, one could be forgiven for having low expectations of the latest in the series of High Level Forums on Aid Effectiveness.

These meetings – Rome 2003, Paris 2005, Accra 2008 and now Busan 2011 – have taken place in an ad hoc but expanding configuration. In Rome, less than 100 delegates, mostly donor officials, met in a room at the Italian Foreign Ministry; in Paris over 500, with civil society present and a stronger Southern participation, filled a much larger space in the French Finance Ministry; in Accra, over 1000 met in a gigantic tent; and in Busan, some 3,000 met in the super-modernist environment of the BEXCO, with attendance from among others the UN Secretary-General and Secretary Clinton for the United States.

Did the Busan outcome justify the profile? Two key questions are whether the Outcome Document represents a qualitative shift in understanding between ‘traditional’ donors and the emerging economies and whether it will have any impact on real development at country level.

The answer to the first question must be a qualified ‘yes’. The traditional donors, skilfully led by Development Assistance Committee (DAC) Chair Brian Atwood, had signalled a strong wish for a new relationship with emerging economies. The main South-South providers had been understandably cautious, arguing that South-South co-operation was radically different in character from North-South aid.

Busan has brought the two positions closer together, not least thanks to patient and determined efforts of South Korea. The outcome document highlights four principles –ownership, focus on results, inclusive partnership, and transparency and accountability – that are agreed to apply to all forms of co-operation. And there is agreement that a new Global Partnership for Effective Development Co-operation will be established in which the emerging economies will be full participants. The existing OECD-hosted Working Party on Aid Effectiveness will be wound up, and new working arrangements are to be agreed by June 2012, with secretariat support from not just OECD but also the UNDP. None of this removes national interest, but it should help to cement the common interest in sustainable progress by poor and aid-dependent countries.

The answer to the second question is less clear. The monitoring of the targets set for 2010 in the Paris Declaration shows that while recipient countries have made modest progress, donors have changed little. True, the independent evaluation of the Paris Declaration argues that the quality of the relationship between recipients and aid providers has changed for the better, and has begun to deliver results. Nevertheless sceptics could well argue that the whole process has proved toothless when donors’ day-to-day incentives do not adequately encourage aid that is more strongly aligned to locally-owned priorities, more supportive of (improved) local systems, more predictable, transparent and results-oriented, and better harmonised among donors.

If the Busan outcome means that global commitments, despite references to Paris/Accra, will be adjusted to what (much poorer) emerging economies are willing to accept, pressures on donors for more effective delivery at country level may be even lower in future. The indicators which the participants have pledged to agree on by June 2012 will be significant in judging this.

The Busan outcome correctly places more responsibility on individual recipient countries or regional groups to push for more effective aid delivery.  Here the signs are quite positive. For example, the African Union mobilised not just governments but African civil society, business and academia to produce a powerful statement of Africa’s wish both to press ahead with the unfinished agenda of aid effectiveness and increasingly to look beyond aid to all the channels that can lead to effective development. This is a sign of a shift towards a more mature relationship between countries that will still need to depend significantly on aid for many years and those who will be providing it.

And Busan also recorded some practical progress, notably on aid transparency. Providers – emerging economies as well as traditional donors – have agreed to make ‘the full range’ of information on publicly-funded development activities publicly available and to implement a common electronic standard for doing this. Meanwhile a key existing standard, the International Aid Transparency Initiative, gained the support of important additional donors, notably the United States, meaning that 80% of all traditional aid will now be reported to the IATI standard. Aid transparency on its own is no panacea, but Busan underscored the need for engagement by Parliaments, civil society, and the private sector, and for addressing corruption – all important if executives are to be held to account.

Transparency, recipient country (not just government) leadership, and a better dialogue among all providers of assistance: even in very tough times for aid, these moves may prove strategically important for more sustainable results.

Richard Manning is a member of the German Marshall Fund Transatlantic Taskforce on Development

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On both sides of the Atlantic budgets are under severe pressure. Governments are seeking to improve the effectiveness of development resources. Last week, the State Department and the U.S. Agency for International Development unveiled the Quadrennial Diplomacy and Development Review, which seeks to bring a more unified, focused and results-based approach to U.S. civilian power. Starting in January 2011, under the Lisbon Treaty, the European Union will launch a new European External Action Service to strengthen policy coherence in areas such as development. Such initiatives could lead to better planning and management of scarce resources with a stronger focus on results. This could help boost legislative oversight as well as evaluation by development agencies. But, there are perils involved with this trend. The following blog posts by Transatlantic Taskforce members Andrew Natsios and Richard Manning offer some insightful perspectives on this subject (http://blog.gmfus.org/2010/12/20/the-dangers-of-development-metrics/).

Andrew Natsios raises important concerns about how ‘Obsessive Measurement Disorder’ can and does make aid agencies less rather than more effective. This is a timely and important issue. In Europe too, the chase is on for donor agencies, their budgets under extraordinary pressure given the bleak economic and fiscal situation in many EU members, to demonstrate ‘results’ and to make themselves ever more accountable.

In some European countries, perhaps most notably in the UK, there is however at least the recognition that over-prescription of targets (in the UK, strongly associated with Gordon Brown) can have counter-productive effects. For example, targets for cutting health service waiting times merely resulted in a queuing system to get on to the controlled waiting lists. As a result, the new Coalition government prefers ‘business plans’ (just published for all British Government Departments). These focus more on what will be done by when than on target-setting as such.

Aid agencies do need to be held to account, value for money needs to be promoted at every level, and results do matter (a focus on results is a much better framework for sound and creative decisions than a focus on commitments or spending), but Andrew Natsios is right that an intelligent rather than formulaic application of a results focus is needed. What might this look like?

A first principle should be that donors’ accountability to their taxpayers must not weaken the incentives for greater local accountability. Instead of building ever more detailed systems of accountability to donors (separate project implementation units, donor-designed project M&E systems, donor-imposed Technical Assistance) donors should be doing much more to help implementing governments and agencies build their own audit and accountability systems.

At country level, this should mean a much more focussed attempt by donors to assist the ‘institutions of accountability’ that all countries need to keep their executive branches honest and effective. So donors should invest in better local audit capacity, better parliamentary scrutiny, a more informed civil society, independent media, more transparent budget systems, and better and more accessible statistics.  Donors should also encourage many more locally-commissioned independent evaluations of key programmes, rather than the present practice where almost all such evaluations are commissioned by donor agencies.

Second, donors should step up action on the transparency of their own aid delivery (strongly urged by President Obama, but also European governments such as Sweden and the UK), ideally in a way that follows consistent standards, such as those set by the International Aid transparency Initiative. Donors have in fact made important commitments in this area at the Accra High Level Forum in 2008: they need to deliver.

Third, donors should be honest about what can reasonably be attributed to aid. In most cases, aid is a complement (often an important one) to locally-funded projects and programmes. It is much better therefore seen as a contributor to the outcomes which such activities are designed to promote. Donors should see themselves as ‘co-investors’ in programmes for, say, enhanced education for girls or lower child mortality. While they should be rigorous at working with local actors to promote the outcomes in question and should report on these to taxpayers, they should be less concerned at having an identifiable ‘British’ or ‘French’ or ‘American’ piece of such programmes that they can showcase separately.

Finally, they should experiment further, as the European Commission has done in its ‘Millennium Contracts’, with making aid more responsive to local performance. Under such ‘contracts’, part of European budget support is enhanced or reduced depending on actual progress registered towards MDG indicators. A similar notion underlies the various forms of ‘output-based aid’ which are being given close attention in various donor capitals.

It is good to see that the next OECD DAC Chair, Brian Atwood, will for the first time ever, be a former head of a major aid agency. Brian is also the first U.S. Chair in over a decade, and well aware of the pressures which Andrew Natsios has underlined. Here’s a real chance for the DAC to move the ‘results agenda’ in a direction that actually promotes……..results.

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Transatlantic Taskforce on Development Blog Series:

On both sides of the Atlantic policymakers are struggling with a common problem – how can we forge better cooperation across the so-called three Ds – development, diplomacy and defense? This challenge was well-identified by the Transatlantic Taskforce on Development, which set out a number of recommendations to address this issue. Since the launching of the Taskforce, there have been major policy reviews and debates in the U.S. and Europe on the three Ds. The following blogs by Taskforce members Richard Manning (UK) and Andrew Natsios (U.S.) (Development and Security: Can the United States overcome beltway disputes and elevate Development alongside Defense and Diplomacy? ) represent fresh assessments of the risks and opportunities for Europe and the United States as this debate continues to unfold with implications for transatlantic cooperation.

Development and Security: Will European Institutional Changes Help or Hinder Effective Action?

LONDON - The Transatlantic Taskforce on Development called for the development and security communities to bridge their divisions in support of its vision of genuine ‘human security’. One of the most significant institutional developments in this respect on the European side of the Atlantic has been the detailed preparation – following ratification of the Lisbon Treaty in November 2009 – of the new European External Affairs Service (EEAS) of the European Union and the appointment of Baroness Cathy Ashton as ‘High Representative’ of the EU responsible for foreign affairs.

Will this development radically improve the synergies between ‘Defense, Diplomacy and Development’, or will it in practice sacrifice attention to longer-term development issues in favor of short-term European political and security objectives? Does it have any lessons for the United States?

These questions are worth asking. Although the new structures do not affect the national aid programmes of EU member states, they are vital to the aid planned and managed by the European Union’s central institutions. And not enough people realize that the ‘Country Programmable Aid’ managed by the European Commission (broadly speaking, those forms of aid that support development at country level) is vastly larger than that provided by any EU member state^[1].

In the past, all this aid was managed by the Commission, with member states setting the broad policies through the Council (with the approval of the European Parliament) and participating also in the ‘Management Committees’, chaired by the Commission, which vet individual activities. The discussion of political aspects of the Union’s external relations, meanwhile, took part in a separate ‘pillar’, in which member states’ Foreign Ministries were the chief actor, with the Commission in a subordinate role. Such a structure tended to keep development and political/security issues apart. This reduced the risk of ‘instrumentalizing’ aid in the service of EU political objectives, but at the cost of maintaining a ‘development-diplomacy divide’ of the kind that the Taskforce wished to see addressed.

The Lisbon Treaty changes the dynamics. The role of the European Parliament vis-à-vis the Council and the Commission has been strengthened, and the Parliament has traditionally given development issues some priority. But the new High Representative (Ashton), supported by the new EEAS, takes control of all EU external policies and chairs the Foreign Affairs Council. The Development Commissioner and the Commissioner responsible for Mediterranean and Eastern neighbors of the EU transfer all their regionally-organized staff as well as overseas staff to the EEAS. The delivery arm of the Commission, EuropeAid or AIDCO, continues to manage the operational aspects of aid, and will now report to the Development Commissioner.

In an intriguing compromise between the Council, Commission and Parliament, it seems that aid spending proposals will be prepared jointly by EEAS and the Commission, but under the responsibility of the Development Commissioner, and then submitted jointly by the Commissioner and the High Representative for decision by the Commission. This does provide some safeguarding of the development objectives in the Treaty, as does the injunction that the EEAS should seek to ensure that these programmes respect the objectives of EU development policy. An additional safeguard is a review of development programming as part of a general review of EEAS proposed for 2013. On the other hand, the High Representative will have the advantage of leading the staff working on the regions concerned.

How will this structure operate in practice? Some difficulties may be expected. The EEAS seems unlikely to be set up with any institutional structure that speaks for the longer-term development issues internally or any obvious career progression for staff with development expertise as opposed to general diplomatic skills. Equally, the rump of the Development Directorate-General may become divorced from the ‘real world’ knowledge of working in the European delegations in-country. The Taskforce vision that the challenges of working in fragile, conflict-prone or post-conflict states ‘should be coordinated by several different branches of government working collectively, preferably led by development professionals’ (my Italics), seems therefore unlikely to be realized in the case of European Union aid.

Nevertheless, the arrangements show that the European institutions can craft compromises that do recognize development objectives. The outcome is better than might have been feared at the outset. With determination from Development Commissioner Andris Piebalgs, a cooperative approach by High Representative Cathy Ashton, and close scrutiny by the European Parliament, a more coherent approach to defense, diplomacy and development that does not marginalize the latter is not impossible. The experiment deserves careful attention – on both sides of the Atlantic.

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