What next for Aid? Double or nothing or new conditionalities?

The International Aid debate has been raging between people like Jeffrey Sachs, William Easterly and more recently Dambisa Moyo, who take extreme positions for phasing out Aid or massively increasing Aid. As Kaufmannn summarises in a recent blog:

“Aid is dead:  it is worse than merely useless, since it abets and perpetuates mis-governance and dependency by Africa.  No, to the contrary, massive additional infusions of aid are crucial for all of Africa.  This massive transfer of aid to governments in Africa is particularly urgent right now, in the midst of the financial crisis, which is bound to inflict permanent damage everywhere in the continent.”

The day to day business of poor governments and donors is more complex and less clear cut than these extremes. In practice there is little opposition or choice between governance reforms and increases in Aid. Pursuing either of the extremes on offer will undoubtably end in fiscal collapse or massive wastage. Neither the suspension of Aid nor the indiscriminate multiplication of Aid will lead to the development nirvana that their prophets promise. If the 20th century taught us anything, it must be that such ‘final’ solutions invariably end in tragedy.

The reality of government and development work is much more incremental and less sensationalist than this. As Kaufmann explains in the same blog:

“It is far less appealing for a media story to have to report that aid can work effectively and can help, but only under certain conditions — in particular where there is a serious commitment to improved governance by recipient country government and by donors.  And not otherwise…”

As Kaufmann acknowledges in his blog, the problem that donors and governments come up against much more regularly is how to encourage such governance reforms without using aid conditionalities. While the wide support for budget support has already limited the scope for the use of conditionalities,  it is also common knowledge that conditionalities are not an effective instrument for influencing recipient governments. Recipient governments seem to find no difficulty in deferring, misreporting or negotiating past such conditionalities. The proliferation and growth of new donors has made it even easier for poor governments to dilute the power of conditionalities.

What can create the domestic political will needed for the governance reforms that make Aid effective? Greater aid coordination? More emphasis on domestic accountability? What do you think?

 

Cash or work: What do people want?

The debate about how best to assist the poor is not going away.  Read some of our previous posts on this in issue in Tanzania , Sierra Leone and Kenya .

Are cash transfers more effective than government services in adressing poverty? If you do settle on cash transfers, should they cover a large part of the population in the form of a basic income grant? Or should such transfers be targeted at specifically vulnerable groups? And what conditions should be attached to such transfers  apart from a means test (every doesn’t even agree that means tests are a good ideas)? Should cash transfers be conditional on some ‘good behaviour’ such as sending your children to school (such as in Oportunidades in Mexico) or are such conditions unnecessary red tape separating cash from people that really need it? These and other similar questions continue to spice efforts to assist the poor and vulnerable.

The NREGA scheme in India is very much at the forefront of these debates. In a recent article Sowmya Kidambi and Aruna Roy of the MKSS argued that the complexities of conditional cash transfers make them more vulnerable to corruption than unconditional entitlements such as the NREGA. They also argue that there are important ideological difference between what they call a ‘cash dole’ and a scheme such as the NREGA that is based on the right to work. Read their article here.

 

What should donors do about Budget Transparency & Accountability?

Why should donor agencies care about budget transparency? And what can they do to increase it in the countries they support?

In a new IBP Brief Paolo de Renzio and Vivek Ramkumar describe how a lack of transparency in aid-recipient countries reduces the potential effectiveness of that aid to reduce poverty and lead to sustainable economic growth because of leakages, corruption, and mismanagement.

In aid-dependent countries, improved transparency of aid flows is also key for enhancing domestic accountability around the budget process. In this Brief, the authors also provide general recommendations to the international donor community and International Financial Institutions (IFI) on how they can support better budget transparency practices in countries to which they provide assistance. Read the Brief here.

Do you agree? What else should donors do?

 

What makes governments change?

In an interview about the current controversy about parliamentarians’ expenses, a British journalist declared that it was just the shame and embarrasment generated by media coverage that motivated the government to deal with the unfolding scandal.

How to move governments is one of the key questions that citizens and civil society organisations (CSOs) ask themselves. And we don’t always have good answers to this question. Failed and successful advocacy campaigns must have a 100 to 1 ratio.

Of course the answer to this million dollar question depends on the country, the government and a large number of other factors. A strong leader of a one party state will not be moved by the same pressure as a democratic head of state that has a strong and independent media. And we can’t expect to move a party with a strong mandate in the same way as a tenuous coalition government.

It also depends who in government you are trying to move. A senior bureaucrat may be interested in research while the political head is more likely to be interested in public perception. We also know that not all public perception weighs the same amount to politicians.  A politician in a state that is aid dependent (Mali, Tanzania or Burkina Faso) may be more concerned about the perception of donors than the same donor in a state that gathers most of its revenue from natural resources (Chad or Angola).

Again a state that is heavily dependent on imports and exports would worry more about international investor and media opinion than in states whose economies are more inward looking.

Sometimes change is driven by ref orm minded burocrats. The IBP’s OBI has even found that competition between states sometimes moves governments to bring about reforms!

So from all of these possibilities and variables, what would you say is the most likely strategy to move your own government? Do you have any examples of how this works? Which successful advocacy campaigns have you been involved in and how did you get government to do what you wanted?

You can answer to this blog, or answer on Twitter,  Facebook or email us directly.

 

Why is your government not more transparent?

Here is a question to YOU: Why isn’t your government more transparent with regard to its budget? Let us have your thoughts here on the blog,  in the Facebook group, on Twitter or at openbudgets@gmail.com

The Open Budget Initiative recently reported on the budget transparency of 85 countries. You will find a completed questionnaire on budget transparency in your country here If you don’t want to read the whole thing, read a summary of your country’s transparency performance on the same page. If you are interested in where your country ranked compared to the other 84, click here.

I hope your country is one of the 86 surveyed in this round. If not, answer the question anyway , based on your own experience.