List of recommendations
More effective aid
1. The Paris Declaration is an important milestone for aid effectiveness. We commend the commitment shown by donors and developing countries to working together to make aid more effective. The UK has performed well against almost all of the Declaration targets and we welcome UK commitment to meet all targets by the 2010 deadline. Global progress, however, has been patchy and slow. We recommend that DFID raise in its discussions with all donors, but particularly the United States and Japan, the urgency of progress against the targets. (Paragraph
11)
2. That transaction costs should come down as a result of better donor coordination is a plausible assumption. We would, however, like to see some hard evidence to prove this. Without it, DFID is operating on guesswork. We recommend that DFID programme the research necessary to provide the evidential base which links DFID's inputs in terms of coordinating with other donors to the outputs of lower transaction costs for the recipient country. This should provide the platform for the additional effort necessary if DFID is to respond positively to the OECD's recommendation that donors need to "work aggressively to reduce the transaction costs of delivering and managing aid". (Paragraph
15)
3. We are pleased to see that the Peer Review carried out by members of the Development Assistance Committee of the Organisation for Economic Cooperation and Development is broadly positive about DFID's performance on aid effectiveness. Where DFID is a leader, it is right that it promotes its achievements. We agree, however, with the Chairman of that Committee that taking this a step further—being "pushy"—does not stimulate cooperation. Cooperation cannot simply be on DFID's terms. Working with others to make aid more effective requires a certain flexibility of approach which DFID has so far found difficult. We recommend that DFID reassess its engagement with other donors on aid effectiveness so as to prioritise effective coordination over promotion of its own model.
(Paragraph 17)
Ownership
4. It is anomalous that the Paris Declaration places so much emphasis on ownership as central to effective development and yet the process set up to monitor the Declaration places so little emphasis on it. We understand the argument that ownership is one of the more difficult principles to measure. Three years on from the Paris agreement, however, the principle of ownership seems to us to be more rather than less critical to the success of international commitments on aid effectiveness. It is therefore imperative that DFID work to agree more effective mechanisms at or following the Accra High Level Forum to monitor progress against a greater range of targets linked to ownership. (Paragraph
20)
5. Governments' natural interlocutors are other governments. But ownership can no longer be understood simply to mean government ownership of the development effort. DFID must consistently define ownership as a democratic process which involves parliaments, civil society and citizens more broadly. We recommend that DFID adopt a strategy to ensure that its programmes secure a broader level of ownership by involving organisations and individuals outside government regularly and meaningfully in its development dialogue with developing country governments. DFID should also make a commitment, as the Swedish Government has done, to place citizens actively at the heart of its development policy, emphasising that they are not simply passive recipients. We also urge DFID to give more active support to parliamentarians in developing countries, including opposition members, to enable them to take a more active part in shaping and monitoring aid to their countries.
(Paragraph 24)
6. We believe that broad ownership and leadership by developing countries of their own development effort is intrinsically necessary, fair and right. This argument would however be stronger with the support of a solid evidential base linking ownership to better development outcomes. Without such a base, DFID is acting in accordance with a broad consensus and with good intentions, but without proof that ownership is right not only in principle but also as a means to achieving effective aid and therefore good value for UK taxpayers. We recommend that DFID pursue such research urgently. (Paragraph
27)
7. Effective leadership by recipient governments of development efforts is particularly difficult in fragile states. We agree with DFID that the UN, despite the many concerns about the effectiveness of that organisation, can play a leading role in such environments. We encourage the Government to include in its strategies for such states complementary engagement with local stakeholders on the ground. (Paragraph
30)
8. Where there is demand from developing countries for technical assistance, we believe that it can be a useful channel for British aid. All too often, however, developing countries assert that technical assistance is a fig leaf for tied aid which allows donors to keep tight control of the assistance on offer. Those donors, such as DFID, who are responsive to these concerns should take a lead in persuading others away from a supply-led approach to technical assistance. On the other hand, DFID must ensure that it has programmes in place to increase the capacity of developing countries to manage and procure technical assistance effectively. We recommend that DFID commit to achieving a technical assistance portfolio which is 100% coordinated and demonstrably demand-driven. (Paragraph
35)
9. It is common sense that budgets are made very difficult for partner countries to manage if they do not know when or how much money will be available. Predictable aid flows allow recipients to plan effectively and for the longer term. We urge DFID to show leadership on this issue at the Accra High Level Forum, drawing on its experience of 10-year development commitments. (Paragraph
39)
Division of labour
10. The European Union has particular responsibilities as the world's largest donor in leading efforts to ensure complementary and coordinated donor activity. The Code of Conduct on the Division of Labour is a useful starting point for this task. We endorse this attempt to draw together good practice principles and guidance into a agreement around which EU governments and the Commission can focus their work. We accept that the Code is in its early days of implementation. But if it is to be credible as a practical agreement, the EU must soon be able to show that it is having an impact on the ground. We recommend that DFID work with the Commission to identify countries in which there is the potential for the Code to have a positive impact and where the recipient government is supportive of the Code, and to prioritise efforts in these countries. (Paragraph
48)
11. We record our disappointment that the Commission is not able to lead by example on questions of aid effectiveness by putting in a stronger performance against the Paris Declaration indicator targets. We challenge the Development Commissioner to take a more pro-active role in promoting practical coordination both among member states and between member states and the Commission. We understand that the percentage of EU aid which falls under the direct control of the Commission will diminish as national budgets increase. But the Commission's coordination role needs to be strengthened irrespective of its share of the EU's total development budget.
(Paragraph 49)
12. The proliferation of donors in recent decades brings welcome new resources to the international development effort but also brings new challenges for recipients in managing a range of donor relationships. The principles contained in the Paris Declaration are as applicable to new donors, such as China, India and Brazil, as to the OECD Development Assistance Committee member countries. We recommend that DFID seek opportunities to share with new donors its own experience of working towards more effective aid but also to support efforts by developing countries to draw new donors into a recipient-led dialogue on aid effectiveness. (Paragraph
57)
Next steps in implementing the Paris agenda
13. We have focused in this Report on ownership and division of labour as the most important components of the Paris Declaration. We agree with many of our witnesses that not enough is being done in these areas. We are therefore pleased to see that key actors at the Accra Forum, such as the International Civil Society Steering Group and the European Commission, have emphasised the importance of making progress on these two issues and will propose ways to do so at the Forum. We are also pleased to see these topics among DFID's several priorities for the Forum. We would, however, recommend that the Government prioritise its efforts for the Forum on taking forward these two particular strands. We believe meaningful progress in these areas could provide renewed impetus for progress on the rest of the Paris Declaration commitments. (Paragraph
61)
14. We believe that the Accra Forum is an opportunity to affirm high-level buy-in to core international standards for effective, high quality aid. The Forum must also address the role of parliaments and civil society in making aid more effective. But practical steps towards better harmonisation and alignment are needed to move from a technocratic to a more practical approach to making aid more effective.
(Paragraph 62)
15. We agree that donor coordination and division of labour is ancillary to developing country ownership of the development process. Yet ambitious forms of coordination and division of labour, whereby DFID works through others whose approach and safeguards are compatible, are a way of making concrete progress against a Paris Declaration principle which is in need of strong leadership. We recommend that DFID develop a set of criteria for such arrangements and undertake a survey to assess where such arrangements might be used effectively. (Paragraph
64)
16. The UK is acknowledged internationally as a leading advocate of direct budget support. This is a tool we have previously welcomed in certain contexts, such as in Vietnam and through the Afghanistan Reconstruction Trust Fund, although we have also raised concerns that it should not be seen as the easy option for spending a rising aid budget. We believe that aid effectiveness arguments are persuasive in making a case for greater use of this instrument where the conditions are right. We recommend that the Government ensure that any decision to support national budgets in partner countries is accompanied by thorough assessment and planning to include parliaments, civil society and other stakeholders in the budget discussions. Funding to build capacity within parliaments and civil society to manage the technical detail involved in such discussions should be included in the relevant DFID programmes. (Paragraph
67)
17. Implementing the Paris Declaration requires some changes in the way DFID operates. Staff buy-in is crucial to the success of any change programme. We are therefore encouraged to hear that DFID's country performance frameworks include aid effectiveness objectives. We are not clear, however, whether: a) all individual staff objectives take account of the Paris Declaration principles; and b) such objectives are deemed as important as other performance assessment measurements, for example in terms of securing bonuses and promotion. We invite the Government to provide examples of these objectives in its response and to clarify the relative importance of them to individual staff. (Paragraph
69)
18. Credible monitoring and evaluation of development impact is needed to show objectively that aid can make a difference. Such assessments both increase public confidence in the development effort and enable agencies such as DFID to tailor their programmes to use budgets most effectively. The credibility of these assessments stems in part from their independence. Self-assessment and donors assessing other donors, as happens under the Development Assistance Committee's Peer Review system, have a role to play but should be complemented by other initiatives. We recommend that DFID actively support such initiatives, especially those led by developing countries, and submit to—and encourage other OECD donors to submit to—reviews conducted other than by peers. (Paragraph
73)
19. The credibility of impact evaluations is also drawn in part from their methodology. We recommend that DFID consider funding more robust impact assessments, such as counterfactual ones carried out by independent development economists, to bolster its evidence base. (Paragraph
74)
Conclusion
20. DFID must ensure that it is not simply joining a well-meaning consensus on aid effectiveness but has done the research to prove to us and, equally importantly, the taxpayer that its approach delivers more effective aid. (Paragraph
76)
21. Joint working between DFID and other donors, and indeed DFID working through other donors, is likely to become a more frequent occurrence and this has implications for the scrutiny performed by this Committee. DFID must work proactively to ensure that we have meaningful oversight of all of its work, however the budget is spent. (Paragraph
77)
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