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Meeting Summary
1. This was the fourth meeting in the joint IDS, IIEd and
ODI 'Development Horizons' series.
Simon Burall made a presentation,
Mick Moore from IDS acted as discussant and the meeting
was chaired by Simon Maxwell, Director of ODI.
Simon Burrall
2. Simon Burall based his presentation on a newly-published
Working Paper on aid architecture. He made four main points:
a. The aid scene was changing very rapidly;
b. The present architecture of the system was highly problematic;
c. A range of responses were being offered, but were inadequate;
and
d. Some better options were available.
3. On the first point, aid was increasing sharply (to $US100bn
in 2005, with further large increases in the pipeline), along
with a proliferation of new actors (donor countries, funding
windows). More new funding instruments had been created in
the last decade than in the previous half century.
4. On the second point, there were underlying tensions about
the objectives of aid and many issues related to aid partnerships.
In addition, the transactions costs were very high: 80% of
projects were for less than $1 - Uganda, for example, had
over 1000 aid instruments over the period 2003-6, and on average
countries were having to receive over 200 donor missions a
year. Aid was increasingly unusable in its current form.
5. On the third point, the technocratic response was enshrined
in the Paris Declaration on Aid Effectiveness, with its emphasis
on harmonisation and alignment. There was also discussion
about the reform of individual institutions, for example through
the work of the High Level Panel on UN System Wide Coherence.
6. It would be useful, however, and this was the fourth point,
to think about further options. There were three of these:
a. 'Paris Plus', involving greater country ownership, better
independent monitoring, and greater accountability of donors
to recipients;
b. A serious attempt to increase the multilateral share from
30% of the total, involving more money through the UN, the
EU, the World Bank and the Regional Development Banks;
c. A new model, involving empowerment of recipients (either
governments or communities).
7. In conclusion, Simon Burall noted that there were
opportunities to take the debate forward, for example in ECOSOC;
through the Paris Review Summit; at the OECD/DAC Global Forum
on Development; or at the Review Summit of the Financing for
Development Conference.
Mick Moore
8. Mick Moore commended the paper
and the presentation. He
agreed that the aid scene was changing very fast and that
proliferation of instruments and donors was a serious problem.
He noted, in addition, that aid consisted of many different
kinds of activities, with a large increase in funding for
consultants.
9. He thought the crusading ambitions of the Paris agenda
and of larger reform efforts were probably unrealistic, however,
and that talk of a consensus for reform over-stated the convergence
of interests around aid. He argued that change would be driven
largely by threats to the system. The shift we had seen from
a highly individualistic system to one focusing on harmonisation
and alignment could be seen as a reaction to the threat from
new donors like China and the philanthropic foundations. The
next step would probably involve giving more choice to countries.
Better information and greater transparency would be essential
if this were to happen.
10. In conclusion, he thought that the 'architecture' metaphor
was an uneasy one and did not capture the organic nature of
the evolving aid system.
Discussion
11. Camilla Toulmin, Director of IIED, spoke briefly.
She argued that the emphasis on general budget support militated
against funding for decentralised operations and for priority
sectors like the environment. She thought that a greater share
of aid could usefully be channelled to local government and
to communities.
12. A number of points were raised about the overall performance
of the aid system and the likelihood of change. Some thought
the multilateral system could be favoured, others thought
this was extremely unlikely. However, the main point discussed
was about the empowerment of aid recipients, through direct
transfers or voucher systems. There was a good deal of support
for this idea, and a good discussion about the information
required to empower consumers in this way (for example, independent
evaluation). There would also be value in looking at regulation
issues in other sectors, for example industrial policy. It
was recognised, however, that reform would raise issues about
power and influence: donor countries would be reluctant to
cede either.
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