12 lessons on effective aid

Written by Jonathan Pryke

Richard Manning, chair the Development Assistance Committee (DAC) of the OECD from 2003 to 2008, knows perhaps more than anyone about how to make aid work better. So his recent paper distilling lessons from a decade of DAC peer reviews is a real gem.

Richard Manning has unparalleled experience. He worked for DFID and its predecessor agencies from 1965 to 2003, including periods spent serving in West Africa and South East Asia, and as Alternate Executive Director at the World Bank. He has worked with the DAC over many years, and was from 2001 to early 2003 Chair of the DAC Task Force on Aid Practices, which produced a report on “Harmonising Donor Practices for Effective Aid Delivery” ahead of the High Level Forum in Rome in 2003. In 2005 he was Co-Chair at the Paris High Level Forum on Aid Effectiveness. As DAC Chair from 2003 to 2008, Richard Manning presided over peer reviews of the development co-operation systems for 22 members of the OECD, and visited all of them.

This is unique experience for learning about the characteristics of effective aid systems – experience that is captured in his new paper ‘Effective Aid Management: Twelve Lessons from DAC Peer Reviews’.

While the peer review process has brought many issues to the attention of the DAC over this period, I have retained here twelve of the more prominent examples of lessons learned or reconfirmed about the factors that encourage effective management of aid funds to achieve development results.

The remainder of this post is a summary of those 12 lessons – an invaluable resource for development practitioners and policy makers.

  1. Find the appropriate legal and political foundation: Have a clear, top-level statement of the purpose of development co-operation, whether in legislation or another form, that has wide ownership and can remain relevant for a sufficient period.
  2. Manage competing national interests: Avoid letting short-term pressures jeopardise the long-term common interest in effective development.
  3. Achieve greater policy coherence for development: Set a clear mandate and establish mechanisms to ensure that policies are assessed for their impacts on poor countries.
  4. Public Awareness: Invest in delivering, measuring and transmitting results of aid-finance activity.
  5. Identify a leadership structure that works: Task a sufficiently senior and publicly accountable figure with clear responsibility at the political level for the delivery of effective development co-operation.
  6. Deal with institutional dispersion: Rationalise bilateral aid structures to facilitate coherent action at country level.
  7. Manage contributions to multilateral institutions: Promote greater coherence between those responsible for different aspects of multilateral aid.
  8. Decentralise management to the field: The decentralisation of responsibility to the field level can be beneficial, but it needs high-quality, lean supporting systems.
  9. Manage the scaling-up of development aid: Radical reforms in aid delivery will be vital as donors are forced to deliver more aid per head of agency staff, while increasing the effectiveness of this aid.
  10. Maintain a focused approach towards countries and sectors: Most DAC members should focus their assistance on fewer countries, fewer sectors and, in particular, fewer activities.
  11. Emphasise performance-based management, evaluation and quality control: Develop a stronger culture of managing for results and align incentives accordingly, but in ways that promote, not weaken, local structures of accountability.
  12. Make human resource management a priority: Securing and developing well-qualified, well-motivated local and expatriate staff is essential for any agency to function effectively. The good news is that quality agencies attract quality staff.

Jonathan Pryke is a Research Associate with the Development Policy Centre at the Crawford School. He is currently writing a paper on aid innovations with Matt Morris, the Deputy Director of the Development Policy Centre.

Jonathan Pryke

Jonathan Pryke worked at the Development Policy Centre from 2011 as a Research Officer and Blog Editor, and left in mid-2015 to take up the position of Melanesia Fellow at the Lowy Institute. He has a Master of Public Policy/Master of Diplomacy from Crawford School of Public Policy and the College of Diplomacy, ANU.

2 Comments

  • Hi Jane & Jonathan.

    I want to make an important correction to the above comment that quotes me as discussing the geographical direction of Australian aid. That was not me, but in fact Stephen Grenville, a consultant on financial sector issues in East Asia and Visiting Fellow at the Lowy Institute for International Policy who made those comments in the new Lowy aid blog:

    http://aidreview.lowyinterpreter.org/post/AusAID-Review-Narrow-the-geographic-focus.aspx

    Since Stephen’s post, further discussion on the geographical direction of Australia’s aid program can be found here http://aidreview.lowyinterpreter.org/ if you are interested

  • As a development practitioner, who has been focussed on implementation for 30 years, I would like to make two observations. Firstly, I think the title of the DAC paper referred to, is a little misleading. The title “12 Lessons on Effective Aid Management” based on lessons from DAC peer reviews, made me interested enough to immediately go to the source paper to see what Richard Manning had learned about poverty reduction between 2003 and 2008. I was a bit disappointed to read an account on how donors could organise themselves domestically and in the field, and relate better to other donors. Does that matter? Probably not to the poor. Does it matter to anyone else? Maybe… but where is the evidence?

    The focus of Manning’s paper – and if we are honest, Paris and Accra as well – is around ‘aid architecture.’ Development assistance is always a delicate balance among competing priorities – but in recent years, there seems to have been a far greater focus on such policy, strategy and organisational issues on the donor side – at the expense of the evidence around poverty reduction in countries. It is time for the pendulum to swing back.

    That, notwithstanding, some of the report findings are particularly relevant to the scaling up of the Australian aid program – for example:

    Managing competing national interests: Human resource shortages in many developing countries are acute and impeding the provision of basic services to the poor. The coordination between Australia’s immigration program and its development program is an example where there is an acute need for greater dialogue and policy coherence.

    Managing contributions to multilaterals: With so much money to spend, it will be tempting to give more money to multilaterals. Do we apply the same transparency and contestability criteria to multilaterals as we do to the rest of the aid program? Manning suggests that greater effort will also be required to ensure stronger strategic and operational connections between multilateral and bilateral programs at country level are made.

    Decentralisation of management to the field: Challenges noted include the need to develop high quality lean supporting systems in the field, as well as a reality of higher field operational costs and potential conflicts between headquarters and the field. A comment by Danielle Cave from a recent blog is worth repeating here…

    ‘The greater shortage, however, is effective and expert administration. Effective implementation requires detailed knowledge of the recipient country and a sharply focused experience of what can and can’t be done with foreign aid. (Danille Cave, Interpreting the aid review)..’

    Fewer countries, fewer activities and fewer sectors: How does this reconcile with Australia’s direction of expansion and scaling up of the aid program?

    ‘The case for narrowing the geographic distribution is strong. There are plenty of poor people in the countries closer to us, which (incidentally but additionally), have more strategic importance. Almost half the Indonesian population lives on less than two dollars a day. If we think that AusAID can shore up and reform failing governments, there are enough of those in the Pacific. Thus there is plenty to do close to home (Danille Cave, Interpreting the aid review)’.

    Performance-based management, evaluation and quality control: DAC peer reviews have pointed to the need to maintain independence of evaluation’s functions to ensure the objectivity and reliability of findings. It will be interesting to see if Australia moves closer to the latest DFID measures to improve transparency and value for money. The recent review of TA and the current review of aid effectiveness suggests that it will.

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