Comments

A sensible, balanced follow up. Excellent work.

Thanks, Paul. I totally agree that there are many instruments and actors involved in any country's development. Yet aid is still an important component, and persists as a tool governments use. Indeed, more countries are giving it. I'm not so sure it is going to go away anytime soon. Further, government aid can help leverage broader flows of money to developing countries, for development purposes. Given aid is money that often gets used for non-development purposes, I think it is useful making sure that the money that is spent gets spent well, and DAC rules help here, as do country strategies. I agree that rigid plans aren't helpful - but a strategy does not have to be a plan. It can be a careful, context-aware relationship-based engagement that allows for flexibility and adaptability in the pursuit of well-being improvements. And as for rules, human-beings are norm-conformers: there are always rules, whether formal or informal, and while we can game the rules, they still shape how we behave and we can use them to positive ends if we get them right.

While aid law and legislation in various donor countries provide an important framework for aid planning and delivery, we may be missing the point that aid itself, with its rules and constraints, may not be (any longer) the best instrument for helping developing countries. Traditional aid is bureaucratic, donor-driven and constrained by many political (and now security) concerns. Players other than governments are in the ascendency (NGOs, private sector investors, foundations, local capital, local civil society, etc.) and we should reduce our focus on "getting the rules right" for what is an old concept and focus instead on broadening aid flows and instruments. DAC rules and five-year donor "country strategies" are very much a 20th century construct, almost sovietish. Paul Hitschfeld Chair, Trade Facilitation Office of Canada (based in Ottawa, operating around the world).

Ian's view on Canada's "toothless" legislation is obviously consistent with my own on most such legislation. As you say, it's not quite clear what he takes to be the relationship between a Canadian ICAI and aid legislation. I don't think he could be suggesting that the creation of such an institution would somehow make the existing legislation more useful, but he might be suggesting that the legislation should be amended, or parallel legislation passed, to give the institution statutory independence. If so, it's worth underlining a point we made in our <a href="https://devpolicy.org/publications/policy_briefs/PB14AidLaw_whatisitgoodfor.pdf">policy brief</a> (p. 5), that the UK's ICAI has no basis in legislation. It is part of the executive branch of government, but is an "advisory non-departmental public body" which is "sponsored" by DFID but reports directly to Parliament. I am not in a position to judge the quality of its work or its impact on the quality of UK aid but, if it has been as successful as claimed, its success owes nothing to statutory independence.

Hi Vinny, I grew up in Lower Hutt, so I'm not really comfortable with dancing. However: Speaking as someone who, in a voluntary capacity, worked with MPs to get the last large aid/gni increase approved in New Zealand, I definitely agree: aid increases are hard to obtain. I'd also add that the NZ situation is much better than what we've seen in Australia. So I'll reiterate a point I've made publicly previously: the aid programme and the minister deserve credit for this. And I know NZ aid programme staff do a good job of turning dollars into outcomes. That said, under standard metrics, the increases--while better than nothing--aren't as much as the casual reader may have taken them to be from your comment. I felt I needed to point that out. Terence

Look forward to your response Terence and Jo! A personal, and *very* non-official, set of thoughts on why we celebrate small increases: a. We work really long hours, and need the smallest (positive, real) excuse to break into dance b. Next time you're in Welly, stop by the front-end of the Terrace and attempt a persuasive argument for a real positive increase in anything and let me know whether you feel like celebrating if you succeed (hat tip: you will feel like celebrating!) c. Because, puppies. (No, seriously - even small aid increases allow us to do <a href="http://goo.gl/oCJjG0" rel="nofollow">things like this</a>)

Thanks Vinny! It's great to have engagement from the aid programme. Jo and I will respond with a blog post next week. In the meantime, I just wanted to make one point now, because it is somewhat tangential, and I don't think it will make our actual blog response. You write that: "The last time we reported an increase in aid was when the aid budget for the 2015/16-2017/18 triennium actually grew by $220 million—an event that we did, in fact, celebrate here in the office as an astoundingly good outcome for developing countries." I hope the celebrating wasn't too over the top. As I showed at the time (link below) the increase was only just above the expected rate of inflation. And it actually represented a fall in ODA/GNI. As we said back then, considering the fate of Australian aid recently, this wasn't such a bad outcome, but I wouldn't call it cause for celebration. Relevant blog post can be found <a href="https://devpolicy.org/the-ups-and-downs-of-new-zealand-aid-budget-2015-20150529/">here</a> cheers Terence

A <a href="http://www.mcleodgroup.ca/2016/07/25/the-oda-accountability-act-what-happened/" rel="nofollow">timely blog</a> from Ian Smillie at the McLeod Group on Canada's Official Development Assistance Accountability Act - the law I am referring to in my comment above. I'm not clear in his blog whether he means the Act would be useful if Canada had an 'Independent Commission for Aid Impact'-type entity, or whether the Act is forever useless. Broadens the conversation out a bit: what mechanisms of scrutiny external to the executive are effective in improving ODA quality?

Thanks Matt, can you provide some info about concerns about rising levels of inequality in Fiji and, in particular, the extent to which increasing urbanisation is contributing to levels of poverty. I know that there is a particular concern about the minimum wage levels and we have yet to see how that will play out. Also, in Figure 1 can you explain what the difference between 'public' and 'government' investment.

Thanks, that's a good question. These comparisons are already adjusted for differences in purchasing power. So the actual global median household would have much less than $US 3,000 in their own currency converted at the market exchange rate. They would have the equivalent in local currency of what $3,000 would buy in the US. I’m assuming market exchange and purchasing power exchange rates are similar for Australia, but, as you point out, they are very different in developing countries, where prices are generally much lower (because labour is paid less). Take India as an example. In India, if you have $3,000 you can buy RP 180,000 at the market exchange rate of about Rp 60 to 1USD. But taking into account difference in purchasing power, the exchange rate is only <a href="http://data.worldbank.org/indicator/PA.NUS.PPP?locations=IN" rel="nofollow">Rs 17 to the dollar</a>, so if you were at the median income in India you would only get Rs 51,000. And that is only $US 850 at market exchange rates. Unimaginable but true.

The SDG initiative unfairly burdens poor countries with climate mitigation - see paper <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2812034" rel="nofollow">here</a>

I am hppay to hear about EAR FMNR initiative is really making change specifically towards restoring ecosystem.