OECD Journal on Development : Development Co-operation - 2006 Report - Efforts and Policies of the Members of the Development Assistance Committee Volume 8 Issue 1.

238 Pages·2007·1.567 MB·English

by  OECD

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premier forum for policy discussions among the major bilateral donors. 1
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ISSN 1563-3152 By Richard Manning,
2007 SUBSCRIPTION ISBN 978-92-64-03105-0
Chair of the OECD Development Assistance Committee (DAC)
(4 ISSUES) 43 2007 01 1 P

Efforts and Policies
of the Members
of the
Development Assistance Committee
Development
Co-operation
Report 2006
Report by Richard Manning
Chair of the Development Assistance Committee
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into
force on 30th September 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
(28thApril1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973),
Mexico (18thMay1994), the Czech Republic (21st December 1995), Hungary (7th May 1996), Poland
(22ndNovember 1996), Korea (12thDecember 1996) and the Slovak Republic (14th December2000). The
Commission of the European Communities takes part in the work of the OECD (Article 13 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.
Publié en français sous le titre :
Coopération pour le développement
Rapport 2006
© OECD 2007
Permission to reproduce a portion of this work for non-commercial purposes or classroom use should be obtained through the Centre français d’exploitation
du droit de copie (CFC), 20, rue des Grands-Augustins, 75006 Paris, France, tel. [phone], fax [phone], for every country except the United
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Danvers, MA 01923 USA, or CCC Online: www.copyright.com. All other applications for permission to reproduce or translate all or part of this book should be
made to OECD Publications, 2, rue André-Pascal, 75775 Paris Cedex 16, France.
PREFACE BY THE SECRETARY-GENERAL
Preface by the Secretary-General
A
s the new Secretary-General of the OECD, Iwant to state my belief that poverty is the ultimate
systemic threat. That a fifth of the world’s people still live in extreme poverty is unacceptable
ethically and morally, dangerous in terms of social and political stability, and it is economically
wasteful as it involves a major underutilisation of resources.
The Development Assistance Committee “is the place where governments come together to
make aid work”. That is the central theme of the DAC, and it needs to be read today in an
increasingly open sense –where all donors, old and new, bilateral and multilateral, public and
private, can join in a collective process of reflection, policy analysis, statistical reporting, evaluation
and monitoring. It is, in a sense, the intellectual headquarters of an expanding industry of providers
of development assistance. In this report, the DAC Chair stresses the importance of local
accountability mechanisms in making sure that all development efforts are producing positive
development outcomes at the grass roots level and that incompetence and corruption are identified
and dealt with. The report describes how the Paris Declaration monitoring process is fostering reform
of aid at the national level. Donors and aid partners are sitting together for the first time in a
systematic effort to identify what is –and is not– working in terms of the local aid system, and
whether sustainable local capacities are being developed. We read here also of the application of the
Paris Declaration principles to the proposals of the WTO Task Force on Aid for Trade –where the
OECD has an important role in measuring flows, evaluating effectiveness and implementing the new
approach.
With the emergence as new aid donors of major new players such as China and India; with the
challenges we face in the areas of climate change, water, health and migration; with conflict and
violence in several “hot spots” threatening stability and progress, Iam convinced that development
co-operation is one of the main instruments that we have to deploy. Iam glad to have the DAC as a
key part of what the OECD can bring to the broader international effort and Iwill work to ensure that
its contribution makes an important and positive impact.
Angel Gurría
Secretary-General
2006 DEVELOPMENT CO-OPERATION REPORT – VOLUME 8, No.1 – ISBN 978-92-64-03105-0 – © OECD 2007 3

FOREWORD
Foreword
2
006has seen another year of growth in income per head for most poor countries at rates which
are above those of OECD countries, in many cases significantly so. This growth has been robust for
some years now, and is gradually changing the realities of development.
Despite these encouraging results, three important questions remain: are such rates of growth
sustainable? Can they –in some cases– even be increased? And are the benefits of growth reaching
the poor? Aid has a role to play in achieving all these goals.
This year’s Report looks at the prospects for increased aid; the issue of aid dependence; the need
for greater domestic accountability; and the Aid for Trade agenda. It also provides preliminary
results from the baseline survey which monitors the Paris Declaration aid effectiveness indicators, as
agreed by the High Level Forum in March2005. The Report notessome real progress on key goals set
by the UNMillennium Assembly, but also notesthe heavy toll of continuing crises on the aid
programmes of the donor community.
As usual, we offer short descriptions of the aid programmes of each member of the OECD
Development Assistance Committee (DAC), and of an increasing number of donors outside the DAC,
as the more multi-polar world of modern development assistance continues to emerge. The Report
also describes briefly the work of the Committee and of its Working Parties and Networks, where
most of its work is carried out.
Finally, the report maintains its long tradition of providing the most up-to-date and detailed
summary of aid statistics available anywhere.
One of the most important contributions of the DAC is to provide the interested and concerned
public with clear and consistent information. Transparency is the mother of effectiveness. Aid is an
investment in a better and safer world. Those who contribute and those who receive it can, and
should, demand that it contributes to tangible results for poor people. Ihope that the information and
analysis in the Report will contribute to an improved debate about its effective use.
Richard Manning
DAC Chair
2006 DEVELOPMENT CO-OPERATION REPORT – VOLUME 8, No.1 – ISBN 978-92-64-03105-0 – © OECD 2007 5
FOREWORD
Acknowledgements
Main authors and contributors to this year’s report were: JuliaBenn, ElenaBernaldo,
RichardCarey, JeanetteDargaville, BenDickinson, MartinaGarcia, BrianHammond,
MasatoHayashikawa, JimHradsky, FransLammersen, RichardManning, CarolaMiras,
Simon Mizrahi, Aimée Nichols, Bill Nicol, Josie Pagani, Madeleine Paris,
RudolphePetras, MichaelRoeskau, SimonScott, JensSedemund, ElisabethThioleron,
ChantalVerger, AnnZimmerman.
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6 2006 DEVELOPMENT CO-OPERATION REPORT – VOLUME 8, No.1 – ISBN 978-92-64-03105-0 – © OECD 2007
TABLE OF CONTENTS
Table of Contents
Preface by the Secretary-General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Foreword. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
List of Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1. Overview by the DAC Chair. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Trends in development assistance: A medium-term perspective . . . . . . . . . . . . . 14
Overall aid volume . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
DAC members’ aid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Innovative finance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Non-DAC donors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Foundations and NGOs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Remittances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Commercial flows. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Major trends in aid allocation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Aid by type of flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Aid by region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Aid by income group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Aid by individual recipient. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Aid dependency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
More effective aid delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Promoting domestic accountability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
What’s the problem? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
More attention to the revenue side of the budget. . . . . . . . . . . . . . . . . . . . . . . . . 31
More support for evidence-based policy making. . . . . . . . . . . . . . . . . . . . . . . . . . 34
More support for representative government . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
More support for an independent judiciary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
More support for independent media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
More support for civil society in its challenge function . . . . . . . . . . . . . . . . . . . . 35
Not just “more”: “More effective”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Keeping the score. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2. Aid for Trade: Making it Effective. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Defining Aid for Trade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Measuring donor support. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Assessing Aid for Trade effectiveness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
2006 DEVELOPMENT CO-OPERATION REPORT – VOLUME 8, No.1 – ISBN 978-92-64-03105-0 – © OECD 2007 7
TABLE OF CONTENTS
Priorities for improvement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Formulate trade policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Mainstream trade in national development strategies. . . . . . . . . . . . . . . . . . . . . 49
Align donors’ strategies to aid effectiveness principles . . . . . . . . . . . . . . . . . . . . 50
Effective Aid for Trade: Local accountability and global monitoring . . . . . . . . . . . 51
Local accountability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Global review. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
3. Preliminary Findings from the 2006Baseline Survey
on Monitoring the Paris Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Ownership (Indicator1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Alignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Indicator2: Building reliable country systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Indicator3: Aligning aid flows with national priorities . . . . . . . . . . . . . . . . . . . . 58
Indicator4: Co-ordinating support to strengthen capacity . . . . . . . . . . . . . . . . . 59
Indicator5: Using strengthened country systems. . . . . . . . . . . . . . . . . . . . . . . . . 60
Indicator6: Avoiding parallel implementation structures. . . . . . . . . . . . . . . . . . 61
Indicator7: Providing more predictable aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Indicator8: Untying aid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Harmonisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Indicator9: Using common arrangements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Indicator10: Conducting joint missions and sharing analysis . . . . . . . . . . . . . . 64
Managing for results (Indicator11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Mutual accountability (Indicator12). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
4. Policies and Efforts of Bilateral Donors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Introduction: DAC members’ aid performance in2005 . . . . . . . . . . . . . . . . . . . . . . 68
Notes on DAC members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Australia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Austria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Belgium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Canada. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Denmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
European Community . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Finland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
France. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Germany. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Greece. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Ireland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Italy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Japan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Luxembourg. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Netherlands. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
New Zealand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Norway. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Portugal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Spain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Sweden. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Switzerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
8 2006 DEVELOPMENT CO-OPERATION REPORT – VOLUME 8, No.1 – ISBN 978-92-64-03105-0 – © OECD 2007