Worth the risk? The dangers of results-based aid

25 November 2009
Comment
Speaking at ODI this week, Andrew Mitchell MP, Shadow Secretary of State for International Development, stated that aid effectiveness would be the top development priority of an incoming Conservative government, if they win the next election.

The Conservatives are prepared to continue with Labour's pledge to increase the quantity of aid (by increasing aid to 0.7% of GNI by 2015). But this is coupled with tougher talk on how aid is used and the need for outside scrutiny through the creation of an independent aid watchdog.

For Mitchell, this is linked to providing value for money and ‘results-based aid' – something that, in the current financial climate, many in development feel under pressure to demonstrate. Yet the speech this week shed little light on Conservative views on the underlying causes of aid ineffectiveness – something which should sit at the core of proposals for solutions.

Part of the problem of aid ineffectiveness lies in the very context for development. Roger Riddell recently pointed out that the central paradox of providing aid where it is most needed is that these may also be contexts where aid is least likely to work. Where there is conflict and instability, or weak state institutions linked to poor accountability and governance, or underdeveloped markets and inadequate regulation, aid ineffectiveness is more likely.

There is increasing recognition within the development community - and within DFID - that despite these challenges, some aid should still be invested where the risks are highest because levels of need are highest. For example, the recent DFID White paper committed to a significant increase in aid spending in fragile states. This recognition calls for innovative, and potentially higher-risk, aid strategies, something an ODI fragile states series has explored.

As part of the Politics and Governance team at ODI, I have been following DFID's recent agenda, spearheaded by Douglas Alexander MP, to ‘think more politically' about development and explore new approaches for fragile contexts. And our research at ODI increasingly shows that the risks of working in fragile or very low income countries are worth taking, provided context-appropriate approaches are adopted, which use tools like political-economy analysis.

Clearly, taxpayers in the UK need to feel assured that aid money is well spent and accounted for, and there are still too many instances where this is not the case. But is there a danger that a focus on value for money and results-based aid encourages working in ‘safe' contexts and in areas where aid ‘results' can be easily measured, but ignores those which need aid the most?

While it may be electorally attractive to use strong messages on value for money and results, the reality of development is that it requires long-term and uncertain investments which extend beyond election-cycles. The Conservative Party's current commitments build on Labour's development achievements and the intention to continue to increase aid spending show just how far they have come. But a shift to rewarding good performers and punishing those deemed ‘bad' could ignore those who are likely to be most vulnerable and countries that need aid the most. In light of this, the emphasis on achieving value for money, at least in the short term, may be unrealistic.

Within the UK, there is reluctance – among all of the major political parties – to engage with the public on some of the challenges and problems faced when giving aid. A results-based agenda that focuses only on success and value for money plays to these fears. Instead, we need an informed debate within the UK (and internationally) on the risks in aid and development, focusing on how to better assess and mitigate those risks. This will help us to understand what aid can realistically achieve.

Do you agree that aid can be ‘worth the risk'?