Comments

hi ... interesting blogs and perspectives .. just wanted to add re importance of context, particulary when aid donors are funding reform programs - need to be realistic about how long it takes to achieve expected outcomes and also the signifcant challenges and issues that needs to be addressed .. .. also ongoing costs and maintanence of various initiatives introduced through aid programs and its implications on Goverment's recurrent budget needs to be considered particularly before procurement of expensive equipment and other big ticket items .. as well as maintanence costs of infrastructure, etc funded through aid funds ..perhaps 'affordability' of aid interventions particularly for the recipient country also needs to be part of the discussions on aid efficiency and effectiveness ... welcome other's views on the issue thanks

Good article. A big issue is measuring the effectiveness of scholarships. It becomes more difficults with the short term awards. How can one determine impact of the short term awards that Australia is increasingly providing….

In reply to Joel's comment about saving lives, World Vision estimates that the delay could result in at least 250,000 lives not being saved over 4 years. This assumes an average cost of $2,000 per life saved (based on Global Fund figures - http://bit.ly/JeiHqL) and 18-20% of the aid budget going to health. The cut in planned ODA is $2.9 billion over four years. It is often possible to save lives for much less, for instance the most cited figure to prevent people dying of TB is $250 and even less for malaria and some vaccine preventable children’s diseases (see http://www.dcp2.org/pubs/PIH) . There are established effective health strategies to prevent deaths from AIDS, TB, malaria, maternal and infant health and early and poorly spaced births. There are also significant unmet needs for additional funding in all of these areas.

Megan, We got the figure from adding together the NPP's outlined on page 5 ('budget highlights') of the blue book (which you can find by following the link at the bottom of Stephen's post), which actually comes to $1.47 billion. Although these figures do cover different time commitments (1, 2 and 4 years) I think the point was to highlight that the NPP culture is still very alive and well even though the review recommended it be cut completely. Jonathan

Hi Stephen, Thanks for this balanced set of rapid reviews. Lots to digest. Not sure if Tim Costello's claim that this budget will lead to 200,000 deaths is sound science but the anger over the broken commitment is understandable. On the Africa increase, page 18 of the CAPF states that of the $1.5b going to Africa in 2015-16, $1b of that will be from global programs and $500m from country programs. So, as you note, still an increase from the suggested $200m cap but the emphasis certainly does seem to be on using multilateral partners. From a public health perspective, interesting to note lots of emphasis on water and sanitation - an area that is often neglected by aid programs (toilets just aren't such an easy aid image to sell!). Thanks again for your reviews and look forward to more discussion on this... Joel

Hi Stephen, I agree with your assertion about New Policy Proposals (NPPs) leading to fragmentation and confusion in the aid program, but not sure how you arrived at the figure of $1.5 billion. Could you please clarify? Many thanks

Mr. Nik Soni, It is very interesting blog Your blog is touch with the reality of foreign aid projects. I am doing a Ph.D. research about the Local knowledge Syndrome and donors-prompted public sector reforms with special attention to the case of Yemen. I think it is very important to focus on process. If we have an effective process, we will have an effective aid project. I think my Ph.D. research covers this subject in good way.

Thanks Robin for the comment, Our central point is to do with donor generosity. It is true that recipient countries might not feel the true force of these cuts, at least not immediately. However, we mostly wanted to highlight that globally donors seem to be viewing their aid programs as expendable, with a few rare exceptions. Even in countries which haven't cut dramatically aid, there are grumblings of discontent and politicians are distancing themselves from aid commitments. When was it decided that aid to the world's poorest should be the first to go when things at home get tough?

Robin, Many thanks for this comment. We did in an earlier draft of the brief have a comparison with the recent (http://www.oecd.org/dataoecd/45/25/50056866.pdf) OECD projections using country programmable aid (CPA) but in the end decided to omit it for reasons of length and complexity. Perhaps that was a mistake. The OECD analysis is much more optimistic than ours. It projects an increase in bilateral CPA in 2012 of some 3% in real terms. By contrast, we estimate cuts in ODA for 2012 of 2.3% before inflation and 4.7% after inflation. Perhaps bilaterals will respond to their own aid cuts, as we suggest, by heavily cutting multilateral contributions, but even then it seems hard to believe that bilateral aid will rise in 2012. It is not clear why these two exercises give such different results. I don’t know when the survey on which the OECD analysis is based was undertaken, but my hunch would be that it might have been overtaken by events. The recent round of budget cuts to aid have come as a surprise. As to whether analysis should be undertaken in terms of ODA, CPA (a subset of ODA for bilateral donors, plus multilateral concessional aid), or, as you suggest, by also looking at other non-concessional official financing, these are surely all relevant. But aid (ODA) is a reasonably well-defined and important aggregate to track. And there has been an aid boom over the last decade. Last year (2011) saw positive nominal growth in aid, but not enough to keep up with inflation. Our finding that aid (ODA) in 2012 is actually going to fall in nominal terms is important enough to justify the analysis. It shows that not only has the aid boom come to an end, but that aid is now on the decline.

Many bilateral aid programs are fragmented and are used as a way of getting business for national firms. They have not done well in international evaluations, so maybe these cutbacks will not have as great an impact as feared.

Kathryn and Stephen, This is an intricate and interesting piece of crystal-ball gazing. It is, of course, not the only attempt to predict global aid aggregates for 2012 and beyond. Reporting and forecasting aid flows is core business for the OECD Development Cooperation Directorate, whose statistics division has been thinking about the best way to do this, and conducting surveys of donors' forward spending plans, for some time. With that in mind, I make the following four comments. First, some aid cuts matter less than others. For this reason, the OECD has, over time, developed the unhappily-named concept of "country programmable aid", which is an attempt to weed out flows that are considered generally not to deliver significant direct benefits to developing countries, such as aid administration costs, eligible spending on refugees in donor countries and debt cancellation. The concept is meant to get at what is "core" aid, or perhaps "available" aid from a developing country perspective. Your policy brief does remove some categories of flow for the purposes of cross-donor comparison – accounting, you indicate, for about 17 per cent of Official Development Assistance (ODA). However, it still includes much that is excluded by the concept of country programmable aid, which excludes on average half of total ODA. Consequently, the actual impact on developing countries of the decline you predict may be less than is implied. Second, what donors spend is less important than what developing countries receive. Even if, contrary to the first point above, all ODA lost was equally mourned, ODA is essentially a measure of donor effort (outflows from donor coffers, either to developing countries or to multilateral organisations) rather than a measure of developing country aid receipts. This might seem an overly subtle point but the money that goes into multilateral organisations, particularly as contributions to replenishments of the multilateral development banks’ concessional financing arms, can take a good while to come out – hence the use by the OECD of another opaquely-named concept – “Official Development Finance” – as a measure of the development financing that is actually received by developing countries in a given year (see, for example, Table B.4 in the OECD's 2011 Development Cooperation Report). Hence, also, the decision to use concessional outflows from multilateral organisations, rather than ODA inflows to them, in calculating country programmable aid. The latter is not merely ODA more narrowly defined; it is more like aid viewed from the receiving end. Third, ODA, private investment and remittances aren’t quite the whole story. Less-concessional official development finance (which is included in the official development finance measure just mentioned) has been small or negative in net terms for much of the last decade, but increased in importance as the multilateral development banks scaled up lending in the post-crisis period. While this category of flow is not relevant to low-income countries, it is relevant to the growing group of middle-income countries that contain the majority of the world’s poor. Trends in less-concessional official development finance matter, along with trends in private investment and remittances. Fourth, the outlook for aid might look very different depending on whether it is viewed from the giving or the receiving end. Putting together the first and second of the points above, what seems to be of most interest is how much country programmable aid might actually be received by developing countries in 2012, and how that might compare to the same figure in 2011. And in fact the OECD has, a month ago, released preliminary findings on exactly this, drawing on early results from a donor survey of spending intentions for the period 2012 to 2015 (final results are due out in June 2012). That survey finds that while country programmable aid declined by 2.4 per cent in real terms from 2010 to 2011, it looks likely to recover in 2012, with about a six per cent real increase. However, this is almost entirely a result of anticipated increases in concessional lending by the multilateral development banks, flowing from recent replenishments (exemplifying the lag mentioned in the second point above). After 2012, it is expected that country programmable aid will remain flat or slightly decline. In short, the stated spending intentions of bilateral donors might be a reasonable basis for predicting what 2012's global ODA aggregate will look like, but ODA doesn't include all financing for development and not all ODA is necessarily experienced as financing for development by developing countries. It would seem desirable to adopt something like the concept of country programmable aid, which removes less relevant flows and takes account of outflows from multilateral organisations, and also to track what is happening with less-concessional official development financing as well as private investment and remittances, if we are to get a better fix on the real implications of falls, or for that matter rises, in ODA budgets.

Dear Mr. Pollard, You are so right, poverty is so invisible. I have come back to implement a carbon credit poverty alleviation project in the Philippines after 35 years in the U.S. I am surprised to find so much denial at all levels on how bad the situation is, whether from the recipients household or the altruistic urban dweller. Poverty in the idyllic island environment is picture perfect, no trash, smiles from "indolent" people. coral sand beaches, blue skies. Why rock the boat? Every now and then, there will be a calamity but "we are not dying in huge numbers..." But in the Philippines, about half of our population are subsistence households who remain alive to eke out a living just to remain alive. Is this really better than starving to death or dying of disease or war. Is this not also misery, but in small bearable daily dosages? What surprises me, though this is not research based, is that the status quo seems to be acceptable, even agreeable to many. As an ex-pat, I understand your view from the "outside," and am having culture shock on understanding the view from the "inside."