{"id":17215,"key":"Aid_effectiveness","title":"Aid effectiveness","latest":{"id":1223884,"timestamp":"2026-01-08T23:37:08Z"},"content_model":"wikitext","license":{"url":"https://www.appropedia.org/Appropedia:Copyrights","title":"CC-BY-SA-4.0"},"source":"[[File:Lichtenberg hundeplatz first aid dog box.jpg|thumb]]\n\n'''Aid effectiveness''', or the '''effectiveness of development aid''', is of vital importance to the recipients of aid by enabling [[Economic development|economic]] and human development, as well as to donors who are interested in increasing the impact of their funding in aid.\n\n== Elements of aid effectiveness ==\n\nThere is no simple answer about what makes aid effective. However, some measures to improve the effectiveness of aid include:\n\n* Increase local ownership of programs and policies. This may need to increase in stages, depending on local capacity.\n* Buy goods and services locally.\n* Direct assistance through the government and local firms where they are able to do the job well\n* Increase local leadership - this is an aspect of capacity building.\n* Prioritize capacity building,{{W|capacity building}} a.k.a. capacity development, in all activities.\n* Ensure accountability, for both resources and results.\n* Aid conditionality{{W|conditionality}} - though this is controversial and can be problematic\n* Improved [[governance]].\n* Inclusive aid partnerships ensuring that the strengths of each partner is utilized.\n* Institutional and staff incentives for effective cooperation as well as for final results.\n* Eliminating factors that lead to risk-aversion and which discourage innovation.\n\n== Historical background ==\n\n=== General information ===\n\n{{Wikipedia excerpt|Aid effectiveness|Historical background|paragraphs=3}}\n\n=== In the United States ===\n\nThe modern [[foreign aid]] system began when the [[United States]] helped to rebuild [[Europe]] through the Marshall Plan.{{W|Marshall Plan}} From the 1960s to the 1980s, foreign aid was often used to support client states of the US and the Soviet Union, which of course compromised the integrity and the development goals of the aid. When the Cold War finished, the stated aims of such aid were refocused on reducing [[poverty]] and boosting development. Donor governments and aid agencies began to cooperate with each other and with developing countries, to improve their impact.\n\nThe Monterrey Consensus{{W|Monterrey Consensus}} agreed on increased funding for development, while acknowledging that the amount of money was not enough - it was essential that the money be used effectively.\n\nSome argue that aid is never effective - Dambisa Moyo{{W|Dambisa Moyo}} has achieved prominence by arguing this (or appearing to argue it, as presented in the media). Most critics, however - even harsh critics such as William Easterly{{W|William Easterly}} - acknowledge that there are examples of effective aid.\n\nOverall, there is widespread agreement that:\n\n* Well-managed and directed aid has been effective, especially in health and basic education\n* Aid is only one factor in the complex process needed for development\n* Economic growth and good governance are essential to development\n\nThe OECD has explored, through its Development Assistance Committee{{W|Development Assistance Committee}} (DAC), why aid has and has not worked in the past. This has resulted in a body of best practices and principles that can be applied globally to make aid work better.\n\n== Research ==\n\nThe '''Micro-Macro Paradox''' is that some researchers (Paul Moseley and others) consider that it is impossible to find a significant correlation between aid and growth rate of GNP, and yet at a micro level, all donor agencies regularly report the success of most of their projects and programs. Possible explanations and observations include:\n\n* Leakage of the aid into unproductive expenditure in the public sector, directly and indirectly through fungibility (i.e. if aid is now covering education, the government doesn't need to spend its own money on education.\n* Improved welfare of the poorest members of society may have a relatively small impact in total monetary terms, and be dwarfed by other factors when looking at GNP.\n* Some improvements in welfare do not have immediate economic impacts - in fact may reduce spending in some areas (e.g. better health due to hygiene practices may result in less money spent of medical care).\n\nBurnside and Dollar recently found that the impact of aid on growth is positive in countries with a good political environment for making policy. This is indicated by a significant and positive coefficient on the 'aid' policy interaction in the growth regression. As a result they advocate selectivity in aid allocation. (See also [[Governance as a condition of aid]].) The difficulty is that this then excludes countries that are less fortunate in terms of policies and require help most. (One possible response is to focus on governance support for such countries - though this may be difficult if the aims of such programs conflict with the aims of those in power.) However, doubt has now been cast on their research and conclusions, in particular by William Easterly{{W|William Easterly}} and his colleagues, who re-estimated the Burnside & Dollar model with updated and extended data, but could not find a significant aid-policy interaction term.\n\nOne problem in these studies on aid is that they typically combine different types of aid without distinguishing them.{{Verification needed}} It would be expected that some type of aids such as short term aid do not have an impact on economic growth while other aids used for infrastructure and investments will result in a positive economic growth.\n\n== Accra Agenda for Action ==\n\n{{Excerpt|Accra Agenda for Action}}\n\n== Paris declaration on aid effectiveness ==\n\n{{Excerpt|Paris High Level Forum on Aid Effectiveness}}\n\n== The OECD's work on aid effectiveness ==\n\nThe Organisation for Economic Co-operation and Development{{W|Organisation for Economic Co-operation and Development}} is the main coordinating body for the international community's efforts to make aid more effective. The OECD traces its roots to the Marshall Plan which sought to rebuild Europe after the Second World War. Today, it groups 30 member countries committed to democratic government and the market economy. It provides a forum where governments can compare and exchange policy experiences, identify good practices and promote decisions and recommendations. In addition to the analysis and advice it provides on a wide range of economic issues, the OECD is one of the world's largest and most reliable sources of statistical, economic and social data.\n\nThe OECD's work on aid effectiveness is undertaken by its Development Assistance Committee{{W|Development Assistance Committee}}, known as the DAC. One of OECD's oldest committees, the DAC was founded in the early 1960s to guide, promote and enhance co-operation with developing countries. Today, it comprises 23 members: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, United States and the European Commission (EC). These countries have significant aid programmes. The World Bank, the International Monetary Fund (IMF) and the United Nations Development Programme (UNDP) participate as observers.\n\nHosted by the DAC, the [https://www.oecd.org/dac/effectiveness Working Party on Aid Effectiveness] (WP-EFF) is the major international forum where developing countries join with multilateral and bilateral donors to work on improving the effectiveness of aid. It was set up in May 2003 to promote the global partnership for development agreed at the 2002 Financing for Development Conference in Monterrey and to accelerate progress towards the Millennium Development Goals. It is the body responsible for organising the Third High-Level Forum on Aid Effectiveness in Accra in September 2008.\n\nThe Working Party on Aid Effectiveness' primary function is to measure and encourage progress in implementing the commitments of the 2005 Paris Declaration and provide guidance on policy and good practice. The Working Party comprises senior policy advisers from the 23 DAC members, 23 developing countries and 11 multilateral organizations. It has a unique \"tripartite\" chairing arrangement, including representatives of a bilateral donor organisation, a multilateral organization and a developing-country partner. This reflects the partnership commitments embodied in the Paris Declaration. The WP-EFF also engages actively with civil society organizations. In order to effectively cover its broad mandate, it has established a number of Joint Ventures to examine particular areas of interest, including monitoring the Paris Declaration, public financial management, procurement, and managing for development results.\n\nIn addition to the work of the WP-EFF, the DAC tackles aid effectiveness issues through its other working parties and regular activities.\n\nThe DAC maintains and makes available unique and definitive statistics on the global aid effort. Its [https://www.oecd.org/dac/stats Working Party on Statistics] tracks official development assistance over time, providing a firm basis for analytical work on aid trends and for assessments of aid effectiveness. Beyond the traditional OECD aid donors, its data collection also includes other official and private flows to developing countries.\n\nOne of the DAC's important tasks is to conduct regular peer reviews of its members' development policies, strategies and activities. Each year, the DAC conducts regular peer reviews of four or five of its members. These reviews look at how members are putting into practice the policy work carried out by the DAC, and how they are responding to international commitments and to their own national goals. These reviews are designed to encourage positive change, support mutual learning and raise the overall effectiveness of aid throughout the donor community.\n\nOther aid effectiveness work is carried out by the DAC's networks—global fora that bring together experts in various fields.\n\nThe [https://www.oecd.org/dac/evaluation Network on Development Evaluation] supports robust, informed and independent evaluation of aid activities. This Network promotes joint reviews of the effectiveness of aid, such as the Evaluation of the Implementation of the Paris Declaration. It also works to improve the standards and norms used in evaluations. The 30 Evaluation Network members include heads of evaluation from all DAC member countries and from the African Development Bank (AfDB), Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD) and the World Bank.\n\nThe DAC's [https://www.oecd.org/dac/gender Network on Gender Equality], GENDERNET, produces practical tools to help integrate gender equality and women's empowerment into all aspects of development co-operation. It is currently focusing on the implementation of the Paris Declaration, designing a set of guiding principles to show how women's empowerment can be clearly integrated into aid effectiveness efforts to increase their impact.\n\nThe [https://www.oecd.org/dac/environment Network on Environment and Development Co-operation], ENVIRONET, aims to enhance the coherence of OECD country policies in the areas of environment and development co-operation, as called for by the Paris Declaration.\n\nThe DAC's [https://www.oecd.org/dac/poverty Network on Poverty Reduction], POVNET, promotes economic growth for poverty reduction, stressing the importance of both the rate and the pattern of growth, and works to ensure that growth is broad-based and inclusive. Subjects of workshops held by this network have included applying Paris Declaration principles in agriculture and infrastructure.\n\nThe [https://www.oecd.org/dac/governance Network on Governance and Capacity Development], GOVNET, helps donors to be more effective in supporting democratic governance. It offers a forum to exchange experiences and lessons, identify and disseminate good practice, and develop policy and analytical tools. It has produced important publications on themes such as fighting corruption, building institutions and ensuring human rights are placed at the centre of aid effectiveness efforts.\n\nThe [https://web.archive.org/web/20160101175253/http://www.oecd.org:80/dac/conflict Network on Situations of Conflict and Fragility] brings together experts on governance and conflict prevention from bilateral and multilateral development co-operation agencies, including the EC, the UN system, the IMF, the World Bank and regional banks. It helps to improve development co-operation and coherent international action in situations where the Millennium Development Goals are undermined by threats of violent conflict, human insecurity, fragility, weak governance and instability.\n\nThe DAC also works on emerging issues in aid effectiveness. In 2008, it published the first in a new series of yearly surveys to tackle two major information gaps that hinder increased aid effectiveness: future spending intentions of donors, and the proliferation of aid donors. The results of these surveys will help donors make more informed decisions about where they should focus their aid, and to improve aid predictability at the country level. New analyses of historical information are also showing where there is donor fragmentation within a country, prompting donors to seek a better division of labour amongst themselves.\n\nThe DAC is working to build recognition among the development community that trade is an important tool for development. Its aim is to increase support for \"aid for trade\" activities—aid that helps build poor countries' capacity to trade successfully. Experts from the DAC and the OECD Trade Committee are disseminating evidence of trade's impact on development and creating an analytical toolbox for improving the design and implementation of aid-for-trade programmes. This includes strengthening the application of the Paris Declaration principles to trade-related aid activities.\n\n== See also ==\n\n* [[Governance as a condition of aid]]\n\n== External links ==\n\n* [[Wikipedia:Aid effectiveness]]\n\n== References ==\n\n<references />\n\n== External links ==\n\n* [http://www.eurodad.org Eurodad: The European Network on Debt and Development]\n* [https://web.archive.org/web/20100523182953/http://topics.developmentgateway.org:80/special/aidharmonization Special Report on Aid Harmonization]\n* [http://news.bbc.co.uk/2/hi/programmes/panorama/7738297.stm \"Addicted to Aid\"-documentary by Sorious Samura]\n* [https://web.archive.org/web/20110524102710/http://rru.worldbank.org/Themes/AidEffectiveness/ World Bank \"Future of the Aid Industry\"]\n* [http://www.cgdev.org/section/topics/aid_effectiveness Center for Global Development: Aid Effectiveness]\n* [http://www.cgdev.org/Publications/MillionsSaved/ Millions Saved] A compilation of case studies of effective foreign assistance by the [http://www.cgdev.org Center for Global Development].\n* [http://www.aidharmonisation.org/ Aidharmonisation.org]\n* [https://web.archive.org/web/20080516014001/http://topics.developmentgateway.org/aideffectiveness Development Gateway Aid Effectiveness Topic Page]\n* [https://web.archive.org/web/20110927152236/http://rru.worldbank.org/PapersLinks/Development-Assistance/ Reading list on the future of development assistance]\n* [https://web.archive.org/web/20081010012302/http://psdblog.worldbank.org:80/psdblog/aid_effectiveness/index.html PSD Blog: aid effectiveness]\n* [https://web.archive.org/web/20060205093636/http://web.archive.org/web/20080511194715/http://www.bostonreview.net/ndf.html Boston Review Forum: Making Aid Work. Initial article arguing for funding of projects confirmed as effective in randomized trials, followed by replies.]\n* [https://web.archive.org/web/20080514143649/http://www.cgap.org:80/portal/site/CGAP/menuitem.23554b6a191b455067808010591010a0/ CGAP's (Consultative Group to Assist the Poor)] Aid Effectiveness Work. Microfinance as a test case.\n* [http://practicalaction.org/?id=africanvoices_agriculture_report The Crisis in African Agriculture: A more effective use for EC aid?] A Practical Action and Pelum 'African Voices' Report\n* [https://web.archive.org/web/20180308233010/http://www.eurodad.org/aid/?id=124 European Network on Debt and Development] reports, news and links on aid effectiveness\n* [https://web.archive.org/web/20070928032655/http://www.euforic.org/detail_page.phtml?&page=resource_briefing_evaluat Euforic] pages on aid evaluation and effectiveness\n* [http://www.three-cs.net Three-Cs.net] Six joint-evaluations to explore and assess the role played by the Maastricht Treaty precepts of coordination, complementarity and coherence (3Cs) in the EU's development co-operation policies and operations\n* [https://www.oecd.org/document/18/0,3343,en_2649_3236398_35401554_1_1_1_1,00.html The OECD DAC's site on the Paris Declaration on Aid Effectiveness]\n* Governance and Social Development Resource Centre's Topic Guide: Aid instruments and aid effectiveness\n* [http://www.accrahlf.net/WBSITE/EXTERNAL/ACCRAEXT/0,,contentMDK:21690872~menuPK:64861438~pagePK:64861884~piPK:64860737~theSitePK:4700791,00.html Milestones in Aid Effectiveness]\n* [http://www.odi.org.uk/publications/briefing/bp39-july08-aid-effectiveness.pdf ODI Briefing Paper: Aid effectiveness after Accra]\n\n{{Copyedit notice|Needs rewriting, from the '''Research''' section onwards. This later part of the article is heavily based on Wikipedia. It needs to be clearer and to the point, and not simply imitate Wikipedia. Sections of writing not highly relevant to Appropedia can be culled right down, and a link placed to Wikipedia if appropriate. Adding new, quality content can also help.}}\n\n{{Page data\n| license = CC-BY-SA-3.0\n| ported-from = https://en.wikipedia.org/wiki/Aid_effectiveness\n| description = Aid works best when transparent and effective. Appropedia analyzes history and strategies to improve global development.\n}}\n\n[[Category:International development]]\n[[Category:Principles of development]]"}