Effectiveness
How effective is Australia's aid, and how is this assessed?Transparency
Aid transparency is an important part of the effectiveness agenda. Transparent and publicly available information on aid flows and projects is vital for public accountability in both donor and recipient countries.
The Development Policy Centre has carried out four audits on the transparency of the Australian aid program, in 2013, 2016, 2019 and 2022. The audits examine what project information is available on the aid program’s website, and what level of detail is provided.
The most recent audit in 2022 showed some worrying results. The aid program listed about 61% of projects over $1 million on the country and regional pages. The availability of basic project information (description, dates, budget, and previous expenditure) for those listed aid projects fell from 69.1% in 2019 to 63.8% in 2022. The availability of detailed documentation about aid projects was even worse, with transparency falling in three of the four document types we assessed between 2019 and 2022. There were still some positive findings. The aid program has done well in making high-level aid budget data and historical aid data available on its website in a timely manner.
As part of its 2023 international development policy, the government has committed to developing a new transparency portal for the aid program which it has said will be finalised by the end of 2024. Other measures of aid transparency are available. For example, Publish What You Fund calculates a transparency index each year. In 2022, Australia scored at the lower end of the “fair” category for transparency, behind most other OECD DAC donors.
Aid performance framework
The Australian government has used different frameworks to measure the performance of Australian aid. Until recently, the government reported against a 2014 framework, principally through an annual Performance of Australian Aid report.
In May 2020 during the COVID-19 pandemic, the government released a new performance framework for the Australian aid program, along with a strategy document, Partnerships for Recovery, on Australia’s development response to the pandemic. The three-tier performance framework reported on the overall context, annual results and effectiveness of Australia’s COVID-19 development response efforts against the objectives set out in Partnerships for Recovery – health security, stability, and economic recovery.
The 2023 development policy updates this three-tiered framework.
Investment and country-level reporting
At the aid investment level, DFAT monitors performance of all its aid investments valued over $3 million annually through self-assessed Investment Monitoring Report (IMR) Ratings. These ratings measure performance on a 1-6 scale against “effectiveness”, “efficiency” and “gender”, where 4 is adequate.
In addition, Final Investment Monitoring Report (FIMR) Ratings are undertaken at project completion. Whereas IMRs are solely the responsibility of the relevant DFAT program area, FIMRs are assessed centrally by DFAT.
Tier Three of the government’s 2023 revised performance framework includes performance targets for both ongoing investments (85% of IMRs rated as satisfactory or above on effectiveness and efficiency) and completed investments (70% of FIMRs rated satisfactory or above on effectiveness and efficiency). The government also reintroduced a gender performance target (80% of projects rated as satisfactory on gender equality).
The chart below shows the shares of ongoing and completed aid investments with satisfactory ratings on effectiveness and efficiency. In 2020-21 and 2021-22, just two in five completed aid investments were rated as unsatisfactory by DFAT, up from one and a half or even one in five just a few years earlier. The average completed investment was rated as less than satisfactory for both effectiveness and efficiency. This raises issues about the performance of the Australian aid program. In May 2023, Devpol published a research report investigating the growing disconnect between the final ratings for ongoing and completed investments. In 2022-23, the disconnect narrowed as the share of completed investments with satisfactory ratings jumped from 60% to 72%.
Under the 2020 performance system, country and regional program performance was assessed through Progress Reports against the corresponding objectives and indicators set out in strategies. See the full set of country and regional Progress Reports from 2019-20 onward.
Under the 2023 development policy, from 2023-24 these annual progress reports are to be replaced by a single "mid-cycle review" for country and regional programs.
Whole-of-program reporting
Under the three-tiered performance framework, DFAT publishes whole-of-program results annually against a set of “Tier One” (Indo-Pacific Development Context), “Tier Two” (Australia’s contribution to development) and “Tier Three” (Operational and organisational effectiveness) indicators. These are reported in DFAT’s Annual Report.
Prior to 2021, DFAT published an annual Performance of Australian Aid report.
From 2022-23, DFAT has recommenced whole-of-program assessment through an annual Performance of Australian Development Cooperation report.
Evaluations
The aid program produces various evaluations of its programs, and annual evaluation plans and outcomes.
In the past, a separate office within the Department called the Office of Development Effectiveness (ODE) conducted thematic and program reviews with independent oversight, however this unit was closed in 2020. Past ODE reviews and evaluations are still available online.
As part of the 2023 international development policy, DFAT has now committed to producing multi-year evaluation plans. The first of these spans 2023-24 to 2025-26. Further detail on aid evaluation.
Independent aid reviews
In 2011, the government commissioned an independent review of the Australian aid program. The purpose of the review was to thoroughly examine the aid program, determine whether the program’s systems, policies and procedures at the time were as effective and efficient as they could be, and to give advice on how to make the program more strategic.
The review panel found that “by the standards of donors generally, Australia is an effective performer”, but that there were problems that needed repairing in the aid program, particularly in the context at the time of the review, when Australia was aiming to meet a 0.5% of GNI target for aid by 2015-16, which did not eventuate.
The review panel made 39 key recommendations for improving Australia’s aid program, ranging from the need for a comprehensive overall strategy and reduced fragmentation (i.e. reducing the number of countries Australian aid focuses on), to recommendations on improving whole-of-government approaches, relationships with partners, transparency and communications.
You can read the full report, or the executive summary.
The 2011 review was not the first review of the aid program. Previous reviews included: the Jackson Report (1984), the Simons Review (1997), the 2005 Core Group Report (and companion volume) that led to the 2006 Aid White Paper. The Australian National Audit Office (ANAO) has also conducted various audits of the aid program.
Australian aid stakeholder survey
In 2013, 2015 and 2018, the Development Policy Centre conducted the three Australian Aid Stakeholder Surveys encompassing stakeholders in the Australian aid program, from the senior executives of Australia’s biggest NGOs and development contracting companies, to the officials of multilateral, partner government and Australian government agencies.
See the full results from 2018, and blog summary.
Parliamentary inquiries
Occasionally, parliamentary committees conduct inquiries into particular areas of Australia’s aid and development policy and practice. These inquiries take submissions and testimony from members of the public, NGOs, government officials, academics and other stakeholders. Inquiries on aid are typically conducted by either the Joint Standing Committee on Foreign Affairs, Defence and Trade, which has a subcommittee on Foreign Affairs and Aid, or the Senate Foreign Affairs, Defence and Trade Committee, which looks at both referred matters and proposed legislation. In recent years, inquiries have examined the role of the private sector in development, bilateral aid to Papua New Guinea, Australia’s relationship with Timor-Leste, and overseas aid more generally.
OECD DAC peer reviews
Each OECD Development Assistance Committee (DAC) member is peer-reviewed every five or so years. According to the DAC, these reviews have two main aims: to help the donor country understand where it could improve its development strategy and structures so that it can increase the effectiveness of its investment; and to identify and share good practice in development policy and strategy. The process is led by two reviewers from other DAC member countries, and takes around six months, with wide consultation.
The most recent DAC peer review of Australian aid took place in 2018. Overall the review was very positive. It commended Australia’s active global engagement on development and its focus on fragile small island states and disaster risk reduction. Efforts on mainstreaming gender were also commended. However it strongly critiqued the successive cuts to the aid budget since 2013, and recommended increases to transparency following the DFAT integration.
Mid-term reviews of Australian aid are carried out in by the OECD DAC in between the main reviews. The most recent mid-term review was carried out in 2021.
Other measures
Aid is only one contribution a country can make to global development. The Center for Global Development publishes an index of the contribution countries make to development in a variety of ways, not only through their aid policy, but also through such policies as trade, migration, and climate change. In 2021, Australia scored third on this index (out of 40 countries rated), but when this rank is adjusted based on wealth it drops to 11.
The Center for Global Development and the Brookings Institute publish regular joint reports on the Quality of Official Development Assistance (QuODA). The QuODA reports assess how donors support the development of institutions in recipient countries, reduce administrative burdens for recipients, maximise the efficiency of their aid, and are transparent. The 2021 QuODA data enables you to see how Australia ranks against other countries.
Summary
- There are several mechanisms in place to assess the effectiveness of Australian aid.
- These include external, usually infrequent, processes such as independent aid reviews, OECD DAC peer reviews, ANAO audits, and parliamentary inquiries.
- The aid program also has an internal system of reporting and reviewing effectiveness.
- Generally, the effectiveness of Australian aid has been positively reviewed, however various assessments have made recommendations for improvement.
- Internationally, there are several agreements that have been made to increase the effectiveness of development assistance. These agreements centre on issues such as transparency, accountability, and strong partnerships between donor and developing countries.