Development co-operation Efforts and policies of the members of the Development Assistance Committee --2009 report.

258 Pages·2009·5.769 MB·English

by  OECD

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The Development Co-operation Report, issued by the OECD Development Assistance Committee D
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took over as Chairman of the DAC, reports back on the Accra High Level Forum on Aid Effectiveness p
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and the need to step up our efforts to make aid work better for developing countries. Development
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budgets have to contend not only with today’s economic and fi nancial crises; the development n
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landscape has also changed radically over recent years, posing new challenges. “It is strikingly , V
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evident”, he writes, “that more of the same will not get us there”. lu
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The report also addresses fragmentation, a major problem when aid comes in too many small slices e
from too many directions. It maintains that transaction costs are escalated by ineffi cient division 1
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of labour among donors and that partner governments need to have complete and transparent /1
forward spending fi gures if they are to pull their countries out of poverty. All of this adds up to
a change in the power relationship between donors and their aid partners.
Finally, drawing on case studies from a number of countries, the Report offers fi ve lessons on how
the Paris Declaration on Aid Effectiveness can be used to make the link between development policy
and human rights, environmental sustainability and gender equality.
This issue is also published on line as part of our efforts to improve the accessibility of key
OECD DAC work and respond to the needs of the aid community by giving prompt and easy
access to the best available analyses and statistics.
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OECD Journal on Development
Efforts and Policies of the Members
of the Development Assistance Committee
Development
Co-operation
Report 2009
Volume 10/1
Report by Eckhard Deutscher
Chair of the Development Assistance Committee
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
Pursuant to Article1 of the Convention signed in Paris on 14thDecember 1960, and which came into
force on 30thSeptember 1961, the Organisation for Economic Co-operation and Development (OECD)
shall promote policies designed:
– To achieve the highest sustainable economic growth and employment and a rising standard of
living in member countries, while maintaining financial stability, and thus to contribute to the
development of the world economy.
– To contribute to sound economic expansion in member as well as non-member countries in the
process of economic development.
– To contribute to the expansion of world trade on a multilateral, non-discriminatory basis in
accordance with international obligations.
The original member countries of the OECD are Austria, Belgium, Canada, Denmark, France,
Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden,
Switzerland, Turkey, the United Kingdom and the United States. The following countries became
members subsequently through accession at the dates indicated hereafter: Japan (28thApril 1964),
Finland (28thJanuary 1969), Australia (7thJune 1971), New Zealand (29thMay 1973), Mexico (18thMay
1994), the Czech Republic (21stDecember 1995), Hungary (7thMay 1996), Poland (22ndNovember 1996),
Korea (12thDecember 1996) and the Slovak Republic (14thDecember 2000). The Commission of the
European Communities takes part in the work of the OECD (Article13 of the OECD Convention).
In order to achieve its aims the OECD has set up a number of specialised committees. One of these is the
Development Assistance Committee, whose members have agreed to secure an expansion of aggregate volume of
resources made available to developing countries and to improve their effectiveness. To this end, members
periodically review together both the amount and the nature of their contributions to aid programmes, bilateral and
multilateral, and consult each other on all other relevant aspects of their development assistance policies.
The members of the Development Assistance Committee are Australia, Austria, Belgium, Canada, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway,
Portugal, Spain, Sweden, Switzerland, the United Kingdom, the United States and the Commission of the European
Communities.
The title of the Development Co-operation Report has traditionally carried the date of the year
preceding its publication. We would like to alert readers to the fact that, as of this issue, the title will
reflect the actual year of publication.This issue will, therefore, be entitled Development Co-operation
Report 2009.Please note that this Report incorporates data submitted to the OECD up to
15November 2008; these data correspond to flows in2007.
Also available in French under the title:
Revue de l’OCDE pour le développement – Volume10/1
Coopération pour le développement
RAPPORT2009
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FOREWORD BY THE SECRETARY-GENERAL
Foreword by the Secretary-General
T
here is no scarcity of worrying news on the global economy these days. This financial crisis is
the worst since the Great Depression and resolving it represents one of the greatest challenges in
recent decades. Hard lessons are being learned, first among them the fact that our leaders can
only solve the crisis by working together. As a hub for dialogue on global challenges, a new, more
plural and relevant OECD is helping to chart the way forward. Times are uncertain, but our
commitment will not be found wanting.
We cannot solve the crisis with “more of the same” policies. We need new approaches and new
institutional mechanisms that will allow us to generate truly global and multidisciplinary responses.
As JohnMaynard Keynes recognised in other times of turbulence: “When the facts change, Ichange
my mind. What do you do, sir?”
One of the big differences between this crisis and previous ones is its global dimension. It caught
us in times of extraordinary interdependence; its consequences are global and thus its solutions have
to be global as well.
The OECD is currently working on a comprehensive policy action plan to help address the crisis
and use the opportunity to build a better world economy. Yet while the current economic crisis
demands tough decisions on the home front, it must not distract our attention from the other grave
structural challenges that we confront. This is where the work of the DAC has made an essential
contribution, and will continue to do so.
It is crucial that in the middle of the storm we don’t lose our sense of direction; that we do not
weaken our efforts to address the perils of poverty, inequality and climate change; that we keep our
commitments to scale up development aid; to keep global trade and investments open; to develop
cleaner energy to protect our environment. OECD has urged heads of state to maintain their aid flows
consistent with commitments made at Gleneagles and elsewhere. On 24November, donors belonging
to the DAC joined in an Aid Pledge, agreeing to maintain aid flows at levels consistent with these
commitments.
This crisis is teaching us a great deal about our vulnerability and interdependence, but it is also
showing that we do have an extraordinary capacity to co-operate and find common understandings
and shared solutions among nations. This found the strongest expression in the aid effectiveness
agenda, a broad international undertaking under the auspices of the DAC.
At the Third High Level Forum on Aid Effectiveness in Accra (2-4September 2008), hosted by
the Government of Ghana, the OECD and the World Bank, an unprecedented alliance of development
partners set out the bold steps necessary to make aid work better for the 1.4billion people who still
live in extreme poverty. Aid is only effective if it gives all people an equal chance at success. This is
why the poor stand to gain most from greater equality of income and opportunity within countries
and between states.
Participants in the Forum signed up to the Accra Agenda for Action (AAA), a roadmap to more
effective aid that signals profound changes for both donors and developing countries. It is a vehicle
DEVELOPMENT CO-OPERATION REPORT 2009 – ISBN 978-92-64-05504-9 – © OECD 2009 3
FOREWORD BY THE SECRETARY-GENERAL
for driving the new aid business model envisioned in the Paris Declaration on Aid Effectiveness,
agreed in March2005.
The actions set forth in this roadmap were identified through extensive consultation.
Developing countries participated alongside major multilateral donors, all OECD donor countries,
hundreds of civil society organisations from around the world and other providers of development
assistance. Developing countries voiced their priorities from the beginning of the process and the
significant actions embodied in the AAA reflect their major concerns. The DAC's contribution on a
range of crucial issues –such as predictability, untying, and division of labour– is essential for
implementing the aid effectiveness agenda.
The analysis provided in this Report is testimony to the central role of the DAC. It offers crucial
information on which we can base the tough decisions we face as we move forward, helping us to
ensure that –despite the challenges ahead– we are willing and able to live up to our commitments
to those most in need.
Angel Gurría
Secretary-General
OECD
4 DEVELOPMENT CO-OPERATION REPORT 2009 – ISBN 978-92-64-05504-9 – © OECD 2009
CREDITS
Credits
Managing editor
ChristineGraves
Contributors
YasminAhmad
EckhardDeutscher
BrianHammond
JennyHedman
KarenJorgensen
BrendaKillen
AiméeNichols
PattiO’Neill
JensSedemund
SuzaneSteensen
Writer/editor
BrianKeeley
Proofreader, Fact checker and Production Manager
CarolaMiras
Cover design
StephanieCoic
Many others have contributed to this Report, and their assistance is gratefully acknowledged.
DEVELOPMENT CO-OPERATION REPORT 2009 – ISBN 978-92-64-05504-9 – © OECD 2009 5

TABLE OF CONTENTS
Table of Contents
Foreword by the Secretary-General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Preface. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1. Globalisation: A Shifting Context for Development Policy . . . . . . . . . . . . . . . . . . . 21
Keeping control: Acollective endeavour. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Working together . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Policy coherence for development: Putting development on the same page . . . . . 25
Time for action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Accra: Amilestone, or where the hard work begins?. . . . . . . . . . . . . . . . . . . . . . . . . 27
Anew relationship between donors and recipients . . . . . . . . . . . . . . . . . . . . . . . . 27
Putting Accra into action. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Fragmentation: Why we need solid foundations for the aid architecture. . . . . . . . 29
Search for solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Development starts at home: Can partner countries grow out of aid? . . . . . . . . . . 31
Aid is growing –but too slowly– and overall targets are slipping out of reach. . 31
Uneven growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Ataxing question . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Making it happen: How to improve our aim –and reach our development goals . 32
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2. How Fragmented Is Aid? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
What’s in this chapter? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Country programmable aid (CPA) –A new measure of fragmentation. . . . . . . . . . . 37
How concentrated and fragmented is aid?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Towards a better division of labour. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
In-country division of labour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Cross-country division of labour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Sectoral division of labour. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Fragile states . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Matrix of donors working in partner countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Notes on interpreting the matrix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
3. How Predictable Is Aid? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
DEVELOPMENT CO-OPERATION REPORT 2009 – ISBN 978-92-64-05504-9 – © OECD 2009 7
TABLE OF CONTENTS
What’s in this chapter? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
The DAC Survey of Indicative Forward Spending Plans . . . . . . . . . . . . . . . . . . . . . . . 55
What does the Survey cover? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Meeting the targets for ODA in2010: How much scaling up is there?. . . . . . . . . . . 56
Aggregate performance of all donors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Aid to Africa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Where will aid be scaled up? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Scaling up by income group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Scaling up by region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Scaling up by country. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Planned decreases in CPA with a focus on countries of special concern. . . . . . . 62
Donor countries’ allocation and budgetary procedures. . . . . . . . . . . . . . . . . . . . . . . 63
Summary of donor development assistance practices. . . . . . . . . . . . . . . . . . . . . . . . 64
Overall budget framework for development co-operation. . . . . . . . . . . . . . . . . . . 64
Planning at the operational level: Donor countries. . . . . . . . . . . . . . . . . . . . . . . . . 65
Planning at the operational level: Multilateral agencies. . . . . . . . . . . . . . . . . . . . . 66
Concluding remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
4. What the Reports Are Saying . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Rethinking development aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Shifting the balance of power. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
What is the Paris Declaration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Reviewing progress. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
What the reports say on the five principles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Alignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Harmonisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Managing for development results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Mutual accountability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Going forward. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
5. The Bigger Picture: The Paris Declaration and Broader Development Goals. . . . . . . 89
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
How the Paris Declaration can advance wider development goals. . . . . . . . . . . . . . 91
Lessons learned from using the Paris Declaration to advance rights, inclusion
and gender equality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Lesson1: Actively involving poor women and men strengthens ownership
and accountability for development results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Lesson2: Aresults-based approach to human rights can improve services
for all citizens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Lesson3: More effective use can be made of joint assistance strategies
to advance development priorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Lesson4: Words must lead to action. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Lesson5: Donors’ harmonised support can help rebuild capacity
in fragile situations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
8 DEVELOPMENT CO-OPERATION REPORT 2009 – ISBN 978-92-64-05504-9 – © OECD 2009