Aid is spent in situations of uncertainty, with conflict and insecurity key outcomes as well as drivers of poverty. With aid facing increasing domestic pressures from donor countries, there is a danger of undermining results over the long term.
The financial crisis and cuts to public spending have seen a growing scrutiny of European aid budgets. As an increasingly polarised debate heats up in the UK, we run the risk of missing what’s important amid the argument over how much we should be spending. Namely, how can aid spending be made to be more effective and – after spending almost a trillion dollars in aid over the last 10 years – why has more progress not been made in improving basic services in developing countries?
In the UK, where the aid budget has been ring-fenced against cuts, domestic political pressures and the need to demonstrate the efficacy of aid to taxpayers has led to a focus on quick and demonstrable results. While this chimes well with the politics of austerity currently popular amongst governments in western nations, it demonstrates little understanding of the political realities on the ground where aid is spent. This has two unintended consequences: it encourages unrealistic expectations of the speed in which aid can achieve results; and it actually restricts the ability of aid to achieve better results over the long term.
While stories about quick results are without doubt the easiest to tell, the reality is that the rise in living standards in countries including the UK didn’t happen in the space of a few years, or even decades. The public needs to be credited with the intelligence to understand that development is a complex process that takes time. And by more clearly communicating what aid can realistically achieve and why, there is a chance to obtain public support for an approach to aid that achieves better results in the long term.
So how can better results be achieved in the long term? At least part of the answer lies in placing an understanding of politics in recipient countries at the centre of the aid effectiveness agenda. Few would argue that politics is central to the provision of public services, and without addressing the political constraints to the provision of services aid will continue to underperform.
Are results enough or is something missing?
Over the last few decades there has been an increase in aid spending targeted towards helping to deliver services in developing countries. Direct spending to areas such as health, education, water and other social services increased from about 10% of total European aid in the early 1990s to around 30% in 2006. Although there are many other important areas of aid spending, a substantial share of the remaining goes to paying staff and other running costs that therefore indirectly contribute to improving services. This increase in spending has led to improvements in access to primary education, health services and treatment of diseases such as HIV/AIDS and malaria in many of the world’s poorest countries. Whilst this progress has been made, aid spending could have been more effective. We should remember that a substantial proportion of the world’s poor still do not have access to clean water, agricultural productivity remains below potential and kilometres of rural roads are of a poor quality.
Traditionally, attempts to improve the effectiveness of aid have been made through delivering funds once specified conditions have been met and rewarding achievements in sectors such as health and education with additional funds. This has resulted in a short term focus that has paid insufficient attention to the complexity of development.
However, new approaches have emerged that argue that donors should focus on development results whilst allowing countries themselves to decide how to go about achieving them. These so called new ‘results based approaches’ disburse funds based on the achievement of outcomes, regardless of how they are achieved. The UK’s Department for International Development is piloting budgetary assistance based on the access of people to particular services in Ethiopia, Rwanda and Uganda.
This approach discards the previous assumption that developing country institutions should mirror those of the donor countries. Instead it implicitly assumes that financial incentives are sufficient to achieve results. However, partly because these approaches are new, only limited analysis of their impact has been carried out. Despite the growing interest in results based approaches, they only constitute a very small proportion of total aid. These approaches also still avoid the real issues of why development progress has been limited.
Whilst expectations have generally been too high in the short term, a more nuanced approach has the potential to yield greater results in the longer term. Aid has been provided for a decade or more with only scant attention to crucial political realities that are blockages to progress and to the provision of public services.
How do these blockages impact on progress?
Political-economy analysis has revealed that many kinds of blockages to service delivery can arise where institutions are not sufficiently developed to ensure their provision. In many developing counties this is typically the case. One such blockage relates to whether policies and institutions are coherent and if a consistent and implementable vision throughout the sector exists. For example, in Malawi, Niger, Rwanda and Uganda research has found that service and infrastructure delivery arrangements commonly reflect an inconsistent policy vision.
Another blockage relates to human resources and the absence of performance discipline – for example it may be the case that civil servants in developing countries are more focused on attending workshops that pay per diems rather than providing services to the public. Without asking why their attention is diverted or constrained a critical part of the puzzle is being missed.
In many low income countries allegiances to a number of different groups inhibits peoples’ ability to collectively problem solve and organise. While people may act together if it is in their mutual interest to do so, they often do not because taking action would involve a cost, whereas they can simply freely use a service or good that is available to all. This is particularly applicable to public goods such as street lighting or water pumps where a contribution from village members may be required to maintain the service, as well as input from local government. Not acting collectively ultimately makes people worse off. Where people have a range of different social and economic obligations, as is often the case in developing countries, the challenge of collective organisation is even greater.
Can aid alleviate these blockages to progress?
Recent ODI research suggests that it can. While these blockages are not unknown in aid circles, there are few cases where they have been tackled effectively. ODI is carrying out research to learn more about the blockages themselves and to examine how aid can be better designed to take them into account.
The focus on achieving results has led to a short term agenda that does little to support countries to address these blockages to progress. Tailoring aid to the specific institutional context in developing countries and understanding the processes underpinning change enables recognition of blockages to progress, when new directions should be pursued, and ensures a direct problem solving focus. The nature of the problems identified are often relationship based, such that actors do not effectively work together to solve problems. This presents opportunities for brokering to be undertaken to increase awareness of roles and responsibilities and to bring actors at different levels together to facilitate a collective response. The not-for-profit development organisation SNV is already applying this approach in some African countries, including Rwanda, Zambia and Tanzania.
Most aid provision is therefore a lost opportunity to push on doors that are already ajar and to better understand the entry points to affect change. This requires a more discerning and patient approach, but has the potential to yield greater results. Realistically, this will be a challenging adjustment that will involve changes in the organisation of donor agencies.
Every pound of public spending is important and it is crucial for the UK public to understand what their taxes are spent on and what has been achieved. Communicating a more complex picture of development to the public is undoubtedly a challenge. But it is critical to building support for a better approach to aid. If we fail to do so we will be left with a results agenda based on political expediency rather than on actually achieving real, enduring results.
Growing scrutiny in an era of austerity is an opportunity to change how aid is perceived.
ODI's Centre for Aid and Public Expenditure will be hosting a conference on the future of development cooperation on 14 and 15 November. Sign-up to participate online and tweet your thoughts, questions and links to #CAPE2012.