Australian Government. AusAID: Office of Development Effectiveness

Aid Effectiveness

Improving the delivery and quality of aid is critical to maximising development impacts and contributing to tangible improvements in the lives of the world’s poorest people. The international aid effectiveness agenda, enshrined in the Paris Declaration on Aid Effectiveness (2005) (Paris Declaration) and confirmed in the Accra Agenda for Action (2008) (AAA), is vital to increasing the impact aid has in reducing poverty and inequality, stimulating growth, building capacity and accelerating achievement of the Millennium Development Goals. Later this year, the Fourth High Level Forum on Aid Effectiveness (HLF-4) will assess progress towards the commitments set out in the international aid effectiveness agenda.

See the materials ODE has compiled in the lead-up to HLF-4 here at our Building towards Busan page.

The Paris Declaration

The Paris Declaration on Aid Effectiveness, signed in Paris in 2005 by more than 100 donors, developing countries and NGOs, was the first significant step towards formalising and focusing international efforts to improve the quality of aid and its contribution to development. The Paris Declaration sets out five inter-related principles for improving the quality of aid: 

  • Ownership: recipient countries should exercise effective leadership over their development policies and strategies and co-ordinate development actions.
  • Alignment: donors should align their overall support with partner countries' national development strategies, institutions and procedures, including delivering more aid through government systems.
  • Harmonisation: donors' actions should be more harmonised, transparent and collectively effective. More aid should be provided through programs and donors should reduce aid fragmentation through better coordination and division of labour.
  • Managing for Results: donors and recipients should manage and implement aid in a way that focuses on the desired results and uses information to improve decision-making.
  • Mutual Accountability: donors and recipients should be accountable to one another for development results and the transparent use of development resources.

The Paris Declaration is grounded in good practices identified over many years and reflects international consensus on reforming aid delivery and management. It reflects the general understanding that aid can only be effective if it supports a country’s own development goals and policies and must be delivered in ways which use and strengthen a country’s own institutions, systems and capacities. Putting this into practice is not always easy.

Accra Agenda for Action (AAA)

At the Third High Level Forum on Aid Effectiveness (HLF-3) in September 2008 donors, partner governments and multilateral development organisations endorsed the Accra Agenda for Action – an ambitious political commitment to accelerating progress in implementing the Paris Declaration. This includes:

  • Greater use of country systems and program-based approaches. This reflects a consensus on partner country systems that you 'can't fix them unless you use them' and requires donors to take a more sophisticated approach to risk management.
  • Provision of capacity development that is 'demand driven', supports country ownership and is sourced in greater proportion from local, regional and south-south expertise.
  • Increased aid predictability and transparency of aid flows.
  • Better division of labour and donor harmonisation to reduce fragmentation of aid.

Fourth High Level Forum on Aid Effectiveness (HLF-4)

In November 2011, the Fourth High Level Forum on Aid Effectiveness (HLF-4) will be held in Busan, South Korea. HLF-4 will be a milestone for international development, drawing on a range of evidence to assess progress towards the commitments set out in the Paris Declaration and the AAA. Specifically, HLF-4 will:  

  • Assess whether key targets have been achieved or not, and why?
  • Identify characteristics of high quality-aid.
  • Frame actions around aid quality in the broader context of development effectiveness to situate the role and impact of aid in the broader development context.

HLF-4 will be a political, multi-stakeholder event of up to 2000 participants from over 150 countries, including ministers, heads of bilateral and multilateral institutions, development country governments, civil society institutions, parliamentarians, local governments, foundations, the private sector and academia.

Emerging priorities for partner countries include: predictable aid, use of country systems, and end to policy conditionality, country-driven capacity development, mutual accountability and reduced transaction costs. Emerging priorities for donors include mutual accountability, managing for results, greater aid transparency, value for money, engaging non-traditional donors, and finding better methods to work effectively in fragile states.

Building towards Busan

Building towards Busan brings together ODE’s podcasts, briefs and case studies on some of the big issues for HLF-4, including transparency, fragile states and South-South cooperation.

Global Progress

Ahead of HLF-4, OECD-DAC will release a number of updated progress reports highlighting key findings from Phase II monitoring and evaluation of the Paris Declaration.

  • The final synthesis report of the Paris Declaration Evaluation, drawing on case studies from 19 partner countries and 7 donors, was published in June 2010.
  • The findings from the OECD-led Paris Declaration Monitoring Survey of 91 countries, and the DAC International Network on Conflict and Fragility-led Fragile States Principles Survey of 13 countries will be available in September 2011 from the OECD-DAC website.

Monitoring global progress towards the targets set out in the Paris Declaration has been undertaken since 2008. The following documents highlight key findings from Phase I monitoring and evaluation of the Paris Declaration:

Australia's Progress

In policy and programming terms, Australia has invested heavily in improving the prospects for greater aid effectiveness. This is now reflected within AusAID in a series of program and corporate reforms, and stronger quality processes. The move to new ways of delivering aid and a strengthened partnership approach mean that Australia is better positioned to balance the demands of the expanding aid program with its ongoing commitment to effectiveness. A strong focus on building performance management and accountability is a key priority for AusAID. The Annual Review of Development Effectiveness (2009) and Australia’s update for the evaluation of the implementation of the Paris Declaration (2010) reporting to the OECD-DAC shows Australian aid is more results-oriented and transparent.

 

Last reviewed: 12 November, 2011

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