The annual DATA Report 2008, launched yesterday, is particularly welcome. It seeks to hold the G8 to account for its Gleneagles commitments on aid to Africa. What do the numbers say? On overseas development assistance (ODA) volumes, it is clear that many G8 members will fail to meet their Gleneagles commitments without dramatic increases in the next few years (see graph below). Between 2004 and 2007 G8 aid volumes rose by 17%, correcting for inflation. Using a simple linear projection, this means that aid volumes will have to increase by 100% between 2007 and 2010 for the G8 to hit its target. Within the G8 group there is wide variation. The EU members set themselves more ambitious targets that many are struggling to reach, while Canada, the US and Japan made less ambitious commitments and are a little closer to meeting them. The UK’s scorecard looks relatively good: its budgetary commitments will bring it close to a relatively ambitious 2010 target.
Of course aid volumes only tell us part of the tale – the quality of aid is an equally if not more important story, though it is a harder one to tell. The expanded focus on aid effectiveness in this years DATA report is therefore very welcome. The report examines the performance of the G8 nations on transparency, predictability (unpredictability can be particularly costly), use of national systems and the untying of aid. The findings are mixed, with some donors taking the aid effectiveness agenda more seriously than others. Most notably, the US is ranked bottom on aid effectiveness, together with Italy. Given that the US spent 29% of all G8 aid to Africa in 2007, this is a particularly troubling finding.
The forthcoming results of the 2008 Paris Declaration Monitoring survey should provide more essential information here in the run up to the Accra High-Level Forum on Aid Effectiveness in September this year. The ODI has also helped to compile some new data sources to assist monitoring on this issue. This is an area where generating accountability processes for improvement in rich countries is particularly difficult. All too often, the public and parliamentary debate is skewed towards concerns on fiduciary risk (which is usually read as risk of corruption). Just as politicians should not be let off the hook on their Gleneagles commitments, nor should they escape their Paris Declaration commitments on aid effectiveness.
We should openly recognise the tensions between these two sets of aid commitments. In particular, there is a clear trade-off between volume increases being delivered through the vertical channels DATA emphasises and the quality of that aid. The simultaneous imperative for rapid increases in aid volumes coupled with the politically attractive idea (to both politicians and NGOs) that aid should be earmarked to specific sectors in recipient countries has exacerbated the dramatic verticalisation and fragmentation of international development assistance. From a country-level perspective this is hugely inconsistent with the emphasis on national ownership of policy choices stressed in the Paris Declaration.
In health for example, while the DATA Report rightly emphasises the crucial role played by health systems, it does not question the impact of scaling-up and verticalisation on those very systems. Recent research shows that new HIV and AIDS funds are swamping public health budgets and threatening to undermine the institutions that will need to carry forward the long term fight against HIV and AIDS at country level. In Tanzania, in 2007 and 2008, HIV and AIDS spending equalled a staggering one third of all aid received, 86% of it from the US and Global Fund and 77% of it not captured in the government budget.
Overall the DATA Report is a very useful addition to global advocacy, clearly presenting the available data on progress against the multiple commitments made by the G8 leaders at the Gleneagles summit and setting this alongside measures of aid quality. At over 246 pages it may be a little long for the average politician to digest and it may benefit from a broadening of focus beyond the G8 in future years, but its core message is clear. What others need to do now is to take the debate forward by examining how we can ensure that actors at the international level deliver their aid pledges in ways that minimise the macroeconomic, fiscal and institutional harm done in recipient countries. It is not an easy story to sell to the public, but that does not make it any less important.