Aid Modalities and Governance Where the Paris Agenda Goes Wrong

1
Aid Modalities and GovernanceWhere the Paris
Agenda Goes Wrong

• Presentation to conference
• Does Aid Work? Can it Work Better?
• Crucial questions on the road to Accra and Doha,
• North-South Institute, Ottawa, 17-18 June 2008
• David Booth,
• Overseas Development Institute, London

2
Four simple questions about Paris and Accra

• The donor commitments are they too radical, or
  not radical enough?
• For donors, do the commitments mean back off
  from involvement in country processes or get
  more engaged?
• The deficit in country ownership of development
  efforts whose business is it?
• Is there evidence to help us answer these
  questions?

3
Four simple answers

• Both, in different sectoral contexts
• Both, in different respects
• Everyones, including donors
• Yes, including the particular research project on
  which this presentation is largely based
• Good Governance, Aid Modalities and Poverty
  Reduction From Better Theory to Better Practice
  (Advisory Board for Irish Aid, April 2008)
• . three key findings

4
Finding 1 About aid delivery

• Current approaches to alignment display an
  unfortunate mix of risk avoidance and political
  correctness
• Unwarranted use of common basket funds instead of
  budget support in service-delivery sectors
  (harmonisation at the expense of country systems)
• Old-fashioned conditionality and micro-management
  in budget support (lack of intellectual
  engagement with country policy processes)
• Unwillingness to be tough-minded on when and why
  parallel Project Management Units are necessary
  (irresponsible apologetics about country systems)

5
Finding 2 About ownership

• Political change on the recipient side of the aid
  relationship is more fundamental, and more
  intractable, than Paris/Accra allows
• The technocratic devices that are stressed
  refined strategy documents, MTEFs and monitoring
  systems are not necessary and wont crack the
  problem
• Nor will more of the same with the addition of
  more parliamentary scrutiny and participatory
  policy making
• Political incentives (presidents and parliaments)
  are the problem
• As a minimum, donors require intelligence, local
  knowledge and a capacity for learning about these
  issues anything less is irresponsible

6
Finding 3 About incentives

• Incentives need more attention on both sides of
  the aid relationship
• Backing off, when this is needed for aid
  effectiveness, is hard because donors are
  risk-averse
• Half-measures that dont work (basket funds) are
  attractive for the same reason
• There needs to be much less attention to aid
  volumes and more to the incentives and
  relationships that reduce the effectiveness of
  aid
• Donors (and NGOs) should take more responsibility
  for educating their parliaments and publics in
  these matters

7
Back to the beginning

• The Paris/Accra agenda
• In key respects, not half radical enough but
  also conducive to mechanical, blanket and
  tokenistic responses, and apologetics
• Micro-manage less, but engage more! with policy
  agendas and with the processes underpinning
  political change
• Stop taking the incentive structures of aid as a
  given, and act to change them!
• Recognise that aid is not a money business but a
  relationship business its institutions that
  matter!