Aid effectiveness

See the issues:

• How to achieve Policy Coherence for Development. What did we learn from the projects about coherence and incoherence of international policies?

• How to design and manage successful cooperation programmes?

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Development effectiveness is the effectiveness of development aid in achieving development (or development targets). Aid effectiveness refers to the degree to which development aid works and is a subject of significant disagreement. 

 

Critiques of the impact of aid argue that aid is only one of the factors in the complex development processes in poor countries .[The Paris Declaration] in 2005 helped build a broad consensus among the international community on how to make aid more effective. At its heart was the commitment to help developing-country governments formulate and implement their own national development plans, according to their national priorities, using, wherever possible, their own planning and implementation systems. 

The Paris Declaration contains 56 partnership commitments aimed at improving the effectiveness of aid. It lays out 12 indicators to provide a measurable and evidence-based way to track progress, and sets targets for 11 of the indicators to be met by 2010.

 

This Manual has aims at supporting the tasks of those who work in the development aid sector. The articles in the Manual where we enter into details about the scope and the tools of projects and program evaluations are grouped in the section 

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Some economists such as Peter Bauer and Milton Friedman argued in the 1960s that aid is ineffective. Many econometric studies in recent years have supported the view that development aid has no effect on the speed with which countries develop. Negative side effects of aid can include an unbalanced appreciation of the recipient's currency (known as Dutch Disease), increasing corruption, and adverse political effects such as delays in necessary economic and democratic reforms.

There is also a lot of debate on the form that development aid should take in order to be effective. It has been argued that a lot of government-to-government aid was ineffective because it was merely a way to support strategically important leaders. A good example of this is the former dictator of Zaire, Mobuto Sese Seko, who lost support from the west after the cold war ended. Mobuto, at the time of his death, had sufficient personal fortune (particularly in Swiss banks) to pay off the entire external debt of Zaire.
 

Another major point of criticism has been that western countries often project their own needs and solutions onto other societies and cultures. As a result of this criticism, western help in some cases has become more 'endogenous', which means that needs as well as solutions are being devised in accordance with local cultures.

It has also been argued that help based on direct donation creates dependency and corruption, and has an adverse effect on local production. As a result, a shift has taken place towards aid based on activatiing local assets and stimulation measures such as microcredit.

Aid has also been ineffective in young recipient countries in which ethnic tensions are strong: sometimes ethnic conflicts have prevented efficient delivery of aid.
 

In some cases, western surpluses that resulted from faulty agricultureal policies and practices, often exported and umped in poor countries, thus wiping out local production and increasing dependency.

In several instances, loans that were considered irretrievable (for instance because funds had been embezzled by a dictator who had died or disappeared), have been written off by donor countries, who subsequently booked this as development aid.
 

In many cases, western governments placed orders with western companies as a form of subsidizing them, and then later shipped these goods to poor countries who often had no use for them. These projects are sometimes called 'white elephants'.

A common criticism in recent years is that rich countries have put so many conditions on aid that it has reduced aid effectiveness. In the example of tied aid, donor countries often require the recipient to purchase goods and services from the donor, even if these are cheaper elsewhere. Other conditions include opening up the country to foreign investment, even if it might not be ready to do so.

 

It is opportune to distinguish aid "effectiveness" from "impact". Aid effectiveness is more a concern at macro level: policies, international agreements, multinational programs, etc. Or even with the effectiveness of aid altogether.  Impact Assessment is more concerned at micro level with the effectiveness of specific actions and programs. 
This manual has mainly a practical concern as it aims at supporting the tasks of those who work in the development aid sector.
 

The manual articles where we will enter in details about the scope and the tools of projects and programs evaluation are grouped in the section 

⇒  How do we Monitor and Evaluate Projects and Programmes?
 

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See the issues:

• How to achieve Policy Coherence for Development. What did we learn from the projects about coherence and incoherence of international policies?

• How to design and manage successful cooperation programmes?