Effectiveness

How effective is Australia's aid, and how is this assessed?

When we look at aid effectiveness, we are looking at how well foreign aid is meeting its objectives. In this section, we will explore some basic principles of aid effectiveness, and look at the ways in which the effectiveness of Australian aid has been assessed in recent years.

Australian aid effectiveness: tools and reports

How effectively aid is given is as important as how much aid is given, where it is given, and what it is given for. How effective aid is not always easy to say, but there is plenty of material for those interested in learning more.

In this section, we will direct you to tools and reports that assess the effectiveness of Australia’s aid.

Australian aid stakeholder survey

In 2013, the Development Policy Centre conducted the first Australian Aid Stakeholder Survey. It surveyed 356 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.

Some of the key findings on Australian aid effectiveness in 2013 were:

  • The aid program was viewed as good and improving.
  • While there was overall satisfaction with the geographical and sectoral focus of the aid program, a wide range of aid effectiveness weaknesses were identified.
  • High staff turnover was identified as the most serious aid effectiveness weakness, and slow decision making as the second most serious.
  • Strategic and commercial interests were perceived to have significant weight as aid objectives. Combined, they were perceived to have more weight than poverty reduction, and more weight than they deserved.

The full 2013 report and various summary documents are available here.

In 2015, a second stakeholder survey attracted 461 respondents. It identified that:

  • The majority of stakeholders (61 per cent) believe the Australian aid program is effective or very effective.
  • Yet, three-quarters of the aid experts surveyed thought that the aid program’s performance had become worse since 2013.
  • A lack of funding predictability following aid cuts was now viewed as the most serious aid effectiveness weakness.
  • Stakeholders also perceived a loss of strategic clarity, aid expertise, and community engagement and transparency.

You can read a blog summarising the results of the 2015 survey here, or download the full report and data.

In 2018, the third aid stakeholder survey attracted 347 responses:

  • Stakeholders offered a more positive assessment of overall Australian aid effectiveness in 2018 than in 2015. Effectiveness has not returned to 2013 levels, but in 2018 most stakeholders thought the aid program was effective or very effective. However, stakeholders are still, as they were in 2015, pessimistic about the direction of the aid program.
  • The rise of facilities – large contractor-managed entities comprising many aid projects – was a notable new issue. A majority of respondents thought that facilities were reducing the effectiveness of Australian aid. A larger majority thinks that they add to transaction costs.

The full results from 2018 are available here, and are summarised on the blog.

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 three audits on the transparency of the Australian aid program, in 2013, 2016 and 2019. 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 2019 showed that for a typical recipient country, the Australian aid program listed 85% of the significant projects it ran on its website. However, performance varied across recipient countries. The availability of planning and design documents and implementation and performance management documents had declined since 2013, but more evaluative materials were available than in earlier years. Larger projects tended to perform better than smaller ones.

Other measures of aid transparency are available. For example, Publish What You Fund calculates a transparency index each year. In 2018, Australia scored in the “fair” (middle) category for transparency.

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 here, or the executive summary here.

The 2011 review was not the first review of the aid program. Previous reviews included: the Jackson Report (1984), the Simons Review (1997), the 2006 Core Group Report (here and here) that led to the 2006 Aid White Paper. The Australian National Audit Office (ANAO) has also conducted various audits of the aid program.

Aid Performance Framework

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 on Australia’s development response to the pandemic.

The three-tier performance framework will report on the overall context, annual results and effectiveness of Australia’s COVID-19 development response efforts. It also sets performance indicators for global programs and partnerships, such as those with multilateral organisations. The performance framework also commits to improve transparency, in line with the methodology used in the Development Policy Centre’s transparency audits, as detailed above.

More detail on the performance framework is available here.

Australian aid program performance reports

The Australian aid program reports on its performance against its own objectives and targets through country and regional reports, as well as annual reports assessing the performance of the aid program as a whole.

The most recent of these reports was the Performance of Australian Aid 2017-18 report, released in April 2019. The report showed that in 2017-18, 88% of aid projects received satisfactory ratings for efficiency, and 92% for effectiveness. It showed that overall, country and regional programs performed well against objectives, but there were areas for improvement, such as improving inclusion in some programs and enhancing evaluation quality. Previous Performance of Australian Aid reports are available here. Previously under AusAID, two Annual Review of Aid Effectiveness reports were published in 2011-12 and 2012-13, which can be found here.

DFAT produces annual reports on Australian aid in the various countries and regions in which the aid program is active. They contain a wealth of information and are available here

Evaluations

The aid program produces various evaluations of its programs, which are collated here.

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 are still available online here.

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 approximately every five 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.

The prior review of Australian aid was carried out in 2013–prior to the AusAID integration into DFAT and while the aid budget was still in its scale-up phase. Overall, it was very positive, praising reform in the aid program, and transparency initiatives at the time. It argued that Australia was “in a very strong position to deliver a growing aid budget effectively and efficiently”.

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 2020, Australia scored 8th on this index (out of 40 countries rated), but when this rank is adjusted based on wealth it drops to 11th. Our aid effort itself was ranked 21st out of 40 countries, a significant decline on past performance. When controlled for wealth, Australia only ranks 34th for its development finance.

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 2018 QuODA data is available here, which 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.
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