Many development organisations are working on the Millennium Development Goals, but will any of them be held accountable when the targets are not met? This column introduces the importance of mapping the “global development finance non-system” in order to identify agencies’ overlap, activity duplication, and mission creep. International reform will be mammoth task.
Recent years have seen a rise in the complexity of donors and aid delivery channels. According to new estimates by the OECD’s Development Assistance Committee (DAC) secretariat, 38 countries had 25 or more multilateral and DAC donors in 2005-062. New official donors, mainly from oil-consuming Asian and oil-rich emerging powers, have entered the scene. So have private donors. The global development finance non-system now encompasses global programmes and non-government organisations, private philanthropy and the private commercial sector, beyond the ‘old’ bilateral and multilateral donors. Some would argue that the breakdown of the old-donor cartel is good news for poor countries as aid becomes more contestable and its supply sources more diversified. Benefits from China’s Africa engagement – more investment in infrastructure – and from new global funds – improved health outcomes – are tangible.
However, recipient-country administrations suffer from the number of interlocutors; moreover, good bureaucrats are thin, at times poached by donors, and in any case diverted from their main task: development on the ground, rather than ”development dialogue”. Knack and Rahman (2007) analyse the impact of donor fragmentation on the quality of government bureaucracy in aid-recipient countries and find that donor fragmentation leads to an erosion of bureaucratic quality.
Mapping the non-system:
A prerequisite for effective ownership and efficient aid delivery, at the core of the Paris Declaration on Aid Effectiveness, is to map the rising complexity of multilateral development finance, to help identify areas for consolidation, address fragmentation and poor co-ordination at country level, and help identify comparative advantages for institutional role assignments among multilateral agencies.
While the Millennium Development Goals (MDGs) agreed by UN member nations in 2000 stay out of reach for many countries, the multilateral duplication and overlap in serving the MDGs is striking, costly, and inefficient.
Recipient countries have to deal not only with more donors, but also with more aid instruments, often designed by multilateral institutions favoured by the G-8.
In recent years, two Multilateral Assessment Frameworks have emerged: the Multilateral Organisations Performance Assessment Network (MOPAN) and the Common Performance Assessment System (COMPAS), designed to assess the efficiency of multilateral organisations. However, these measures cannot improve the coherence of the entire (non-)system as they do not lend to inter-agency comparisons or identify clearly overlap, duplication, and mission creep. They are self-driven instruments, and they do not cut ministerial agency dependence and patronage.
International reform
Reforming the multilateral aid (non-)system will have to observe (and reduce) system complexity. Streamlining multilateral organisations should be actively considered. Other rules are the policy and poverty selectivity of lending, reform ownership building, the subsidiarity principle of placing institutions at the local level, alignment with other donors, avoidance of country overlaps, and agency procedures such as speed of disbursement.
Conclusion
Realistically, reform must start from outside, as vested interests in agency survival are strong. To make advances in streamlining the current (non-) system, existing circles of institutional patronage need to be broken. This requires a summit-level initiative that goes beyond the level of ministers (who are likely to defend ‘their’ international organisation). New approaches to global governance require a more inclusive, representative, and simplified system of multilateral development finance.
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Filed under: Beyond WECA
