Washington , D.C., August 29, 2008— As food shortages and fuel price shocks have swelled the ranks of the poor by 100 million – 30 million in Africa alone, the international community is meeting in Accra to find a way to unlock the full potential of development assistance.
The Accra High-Level Forum on Aid Effectiveness, taking place September 2-4 in Ghana, will assess the progress made since the Paris Declaration on Aid Effectiveness was adopted in 2005. The Paris Declaration redefined the development process as a partnership in which countries take the lead in their own development, and donors support the process through capacity development, improved coordination at the country level, and more predictable aid flows.
The five key principles of aid effectiveness articulated in the Paris Declaration – ownership, alignment, harmonization, managing for results, and mutual accountability – captured the essence of both donor and partner country frustrations with the way aid was being managed. Countries wanted more say in how aid is used, while donors, mindful of the expectations of their citizens and shareholders, wanted countries to develop results-based, monitorable systems for managing aid flows, and to address issues of corruption.
Managing aid effectively
Three years later, countries have made progress in establishing accountable aid management systems, and donors in aligning their aid with country-led programs. But, the international community still is not having enough positive impact on the lives of the world’s most vulnerable people. Reviews by the World Bank and other aid agencies, conducted in broad consultation with partner countries, have identified three major and interrelated areas where both sides need to do better.
First, country ownership and leadership of the development process needs to be strengthened . As ownership is probably the most important variable in determining the effective use of aid, countries need to strengthen their capacity to lead and manage development, and to work more closely with parliaments, local governments, and civil society in planning, implementing, and monitoring development plans and programs. Donors need to help strengthen country-level capacity to manage public resources through their own institutions and systems, and donors themselves need to rely on these country-level mechanisms wherever possible, and to help strengthen them when they cannot.
Second, more effective development partnerships depend on increasing inclusion, harmonization, and division of labor . Partnerships are critical for harnessing the experience and skills of all development actors, including middle-income countries, global funds, civil society organizations, and the private sector. At the international level, partnerships also serve as mechanisms for aligning and harmonizing the assistance and accountability frameworks of multiple donors, according to the Paris principles of aid effectiveness, with countries taking the lead in managing aid and determining the role that each external partner will play in the development process. At the country level, partnerships create the space for civil society and the private sector to participate in development planning, implementation, and monitoring.
Third, countries and donors need to be mutually accountable for development results. To ensure that all parties are individually and collectively accountable for planning and aligning aid on national priorities, improving the predictability of aid, and achieving real outcomes, countries and donors need to work in partnership to develop cost-effective instruments – including in-country statistical systems, international monitoring systems, and mutual assessment reviews – to assess the impact of development efforts. Strengthening country-level mechanisms also depends on broadening participation to include parliamentarians, citizens and civil society organizations; and on a willingness to learn from independent evaluations and mutual assessments of aid effectiveness. In addition, countries need to increase transparency in public financial management, strengthen budget planning processes, and address problems of corruption, all of which will increase donor confidence that untied aid resources will be used effectively. Donors also need to be more transparent – publicly disclosing regular and detailed information on all their aid flows, to enable more accurate budgeting, accounting, and auditing in the countries they support.
Making these changes will depend on the commitment, flexibility, and political will of all members of the development community. The World Bank is strongly supportive of the actions described above. More broadly, however, aid and aid effectiveness are only part of the development picture. Progress toward eliminating poverty also depends on broad-based economic growth, environmental sustainability, and social progress, including gender equality, respect for human rights, and participatory forms of government