Abstract:

In 2021 and 2022, two in five completed aid investments were rated as unsatisfactory by the Department of Foreign Affairs and Trade (DFAT), up from one and a half or even one in five just a few years earlier. Since 2020, the average completed investment has been rated as less than satisfactory for both effectiveness and efficiency. There is also a large and growing disconnect between the assessments of ongoing and completed investments. This report documents these recent trends in reported Australian aid performance and shows that a major factor behind them is methodological. DFAT is to be commended for having moved in 2019 to a more independent system of ratings for completed investments. However, further reforms are needed given the significantly lower ratings that have resulted. We recommend that DFAT re-establish its performance-oversight architecture – in the form of the Office of Development Effectiveness and the Independent Evaluation Committee – and strengthen other parts of its performance review and reporting system.