Evaluating EU aid: a booming business!

9 May 2012
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As the wave of austerity unfolds across Europe and pressure mounts on aid budgets, donors are under increasing pressure to demonstrate accountability, value for money and evidence of effectiveness.  Enter the EU…  Following the assessment of the EU as part of the UK Department for International Development’s Multilateral Aid Review, the EU aid programme has undergone a further evaluation in the UK by the House of Commons International Development Committee (IDC), a peer review by the OECD Development Assistance Committee (DAC) and an evaluation by the Dutch Government (still to be published).  And it’s not over.  The Independent Commission for Aid Impact is also lining up to evaluate the EU.  The danger is that instead of making it more effective, too much auditing might become crippling. 

The IDC inquiry into EU aid, published on 27 April, and the OECD DAC peer review of EU aid, published three days earlier, ran in parallel.  The former focuses mainly on the comparative advantage of EU aid, the new direction for EU development policy and future funding.  The latter report is a lot more comprehensive, analysing the overall policy and strategic framework, the funding, the institutional structures, organisation and management, the procedures and the impact of the EU’s development and humanitarian aid programmes. 

Luckily, the main findings of the evaluations were not dissimilar.  Both acknowledge the size, importance and added value of the EU aid programme.  Both recognise the improvements in the programme over the last few years.  The IDC notes that “the European Commission has improved its performance over the last decade and has recently proposed further improvements to development policy”, whilst the DAC purports that “the EU has taken steps to make its aid more effective and give it more impact.”  Both highlight areas for improvement, including ensuring a results focus, clarity of institutional workings, relationships and policies, coherence of EU policies with development objectives and capacity, knowledge management and expertise.

However, the key takeaways from both reports are rather different.  For the IDC, the headline is, “Too much EU development aid is going to middle income countries, like Turkey and Serbia, and not enough is reaching the world's poorest people and poorest countries”.  The DAC is slightly less forthright, focusing on a cumbersome procedures and the need for the EU strengthen its shared vision, common commitments and joint approaches. 

There are some stark contrasts between the two reports.  An abysmal poverty focus for the IDC is “an impressive geographical reach” for the DAC. For the IDC, joint programming à la European Commission is unacceptable.  For the DAC, joint programming “may be a good way forward” and the EU institutions should demonstrate “the benefits of moving towards joint programming.”

And there are some differences of approach.  So, for example, although both the IDC and the DAC support the Commission’s proposals for differentiated partnerships which will inevitably lead to a redirection of aid away from Middle Income Countries, the IDC insists that the proposals do not go far enough and that more than the proposed 19 countries should come under consideration.  The DAC, however, cautions that it should be managed carefully and that “a strategic, inclusive approach is needed in partner countries from which the EU plans to phase out, taking into account the required division of labour.”   

Interestingly, the DAC stops short of recommendations on whether or not to integrate the European Development Fund (EDF) into the main EU budget.  Whereas the IDC explicitly states that it does not support the EDF becoming part of the main Commission budget in 2014, the DAC refers to the Commission’s attempts to align the EDF and EU budget, and suggests streamlining the approval processes.

Which of these recommendations will the Commission chose to learn from?  Which will it ignore?  And which will it reinterpret to fit existing preferences?  There may be some clues in the EU Development Commissioner’s response: “Our ambition is to provide more and better aid which ensures we make a real difference in helping the victims of disasters and crises, overcoming poverty and achieving sustainable and inclusive growth. We recognise, however, the need to further improve our work … We will focus on fewer sectors and direct more aid to the poorest countries where it can have the biggest impact.” 

The IDC is right on its key point: the Commission would do well to focus efforts on the poorest countries, and develop new partnerships with the others. EU aid to Upper Middle Income Countries is currently four times the DAC average, and has been widely criticised as being insufficiently targeted on poverty eradication – not only by the IDC, but also by the DAC in previous peer reviews, and other stakeholders. At the same time, while no one questions the validity of the Commission providing substantial support to countries like Turkey to prepare it for accession to the EU, the question is whether this should be counted as Official Development Assistance.  One for the DAC…