Towards a new leading paradigm of effective aid ?

1. Towards a new leading paradigm of effective aid? Alina Rocha Menocal, ODI Presentation prepared for the Southern Voices Workshop ODI, London, 14-16 November 2005

2. The ‘new aid agenda’ • Where did it come from? • What is it? • How is it intended to be achieved? • Where are Southern Voices? 2

3. Aid trends and fads • 1960s: with donor support, newly independent governments hurry to displace the private sector • 1970s: donors in a hurry to displace government • 1980s: governments, responding to donor/ IFI stipulations, return ownership to private sector • 1990s: donors begin to return ownership to government 3

4. Principles embedded in the new aid relationship • Donors began to reconsider, at least in theory, the nature of their engagement with recipient countries. • ‘Washington Consensus’ slowly replaced by a new paradigm of effective aid that is founded on a discourse of country ownership, partnership, and ‘mutual accountability’ • Not all donors subscribe equally to this new consensus, but no donors reject it explicitly.

5. Ownership and partnership • PRSPs have been instituted to foster country ownership. • PRSPs are intended to be development strategy documents prepared by governments through a participatory process involving civil society and development partners. • MDGs are also meant to be achieved through genuine partnership between donors and recipient countries.

6. ‘Mutual Accountability’ • Principle of ‘Mutual accountability’ is enshrined in several international and regional agreements and declarations. • Monterrey Consensus • Regional initiatives like the New Partnership for Africa’s Development (NEPAD) • DAC of the OECD and its formal commitment to support NEPAD and to promote the ‘good governance’ of aid. • In practice however the ‘MA’ agenda has a long way to go to become a reality.

7. ‘Scaling up’ aid • Over the past few years, calls for ‘scaling up’ aid have become increasingly influential. • The emphasis on ‘scaling up’ development efforts has focused on issues of both quantity and quality of aid. • Perceived need to scale up aid is based on the premise that adequate, predictable and more effective aid flows are critical to reaching the MDGs. • The sharpest percentage increase is likely to occur in Africa.

8. Aid quality: current problems • In a 2002 OECD-DAC ‘Needs Assessment Survey’, the following (listed according to priority) donor practices were identified as the most burdensome from an African perspective: • Donor driven priorities and systems, including i) donor pressures on partners’ development strategies and priorities and ii) aid management systems supporting donor requirements, not national systems • Uncoordinated donor practices, particularly understanding and fulfilling the multiple, diverse requirements of different donors • Difficulties in complying with donor procedures (especially procurement and TA) and frequent changes to donor policies, systems and staff

9. Aid quality: Responses • A growing consensus has emerged among donors and recipient country governments on what needs to be done to make ODA work better. • The concepts of harmonisation and alignment have thus come to the centre of the aid agenda.

10. Defining Harmonisation & Alignment (H&A) • Harmonisation involves better coordination among donors. • Alignment involves donors following or ‘aligning with’ country policies and priorities. • Alignment also calls for increased donor reliance on national systems through SWAPs and Budget Support, for eg.

11. Paris Declaration on Aid Effectiveness • Signed at the Paris High-Level Forum on Aid Effectiveness (2005) by: 35 donor countries and agencies 26 multilateral donor agencies 56 aid recipient countries 14 civil society organisations • Mutual accountability between donor and partner countries • Actionable commitments to deliver more effective aid based on 12 indicators

12. Highlighting some of the tensions in the new aid agenda • Whether these initiatives will bear fruit still an open question. • Fundamental tensions / unresolved issues within this new leading paradigm remain unresolved: • Harmonisation and alignment not always go hand in hand • Alignment to what? • Tension between ownership and conditionality • However, those are the trends that the main actors shaping the international aid system are moving toward, at least at the rhetorical level.

13. Locating Southern CSO input in this debate • Admittedly, most of the impetus and intellectual leadership for reforming the international aid system along the lines described above has come from donors themselves. • Northern CSOs have begun to engage with this agenda, but so far, except for a very few exceptions (like the Reality of Aid, for eg) the views and perspectives of Southern CSOs in shaping such trends have been muted, and their contribution to the debate on how to reform the aid system has been rather limited. • This is in marked contrast to the heavy involvement of Southern CSOs on the debates and discussion surrounding debt cancellation, for example.

14. Why have Southern CSO voices remained muted? • Lack of appropriate fora to promote dialogue among Southern CSOs on aid architecture issues and the future of aid more broadly. • Southern CSOs have other priorities. • Capacity of Southern CSOs to engage with these issues • Scepticism among Southern voices that their proposals can impact the actions of rich countries and the international organisations they are believed to dominate. • Maybe engagement with the debate on the existing international aid system and how to reform it is one of degree? Technical reforms vs. more radical transformations.

15. But why Southern CSO engagement matters… • Within a current international context in which aid flows to poor countries are bound to increase substantially if commitments are met, issues related to how the aid system may be made to work better are all the more pressing. • And if voices from the South are not heard, their omission from the debate could be a missed opportunity to reform the international aid system in a way that is more responsive to and better addresses the needs of the poor.

16. The Southern Voices Project and the FFA • Aim of the project and FFA is to encourage Southern CSOs to become more fully involved in this debate and to facilitate a dialogue on the desirable future structure, instruments, and major processes of international aid. • Intent is that Southern CSO perspectives can be brought to the attention of donor governments, international agencies, and Northern CSOs, as well as recipient governments, in real time and in as transparent a manner as possible. • This workshop is a critical step in this direction • Many thanks to all of you for coming and for sharing your views.

17. Which Way the Future of Aid? Let the conversation begin!