Rt Hon Sir Malcolm Bruce MP – Chair of the International Development Select Committee in the House of Commons
Thijs Berman MEP- Member of the European Parliament’s Committee on Development (DEVE)
Karen Jorgensen - Head of Division, Review, Evaluation and Engagement (REED), Development Cooperation Directorate, OECD
Lord Hollick - Member of the House of Lords Economic Affairs Committee
Simon Maxwell- Senior Research Associate, ODI
As a wave of austerity unfolds across Europe, donors are under increasing pressure to demonstrate accountability, value for money and effectiveness of aid budgets. 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 review in the UK by the House of Commons International Development Committee (IDC), the House of Lords Economic Affairs Committee, a peer review by the OECD Development Assistance Committee (DAC) and an evaluation by the Dutch Government (still to be published). The Independent Commission for Aid Impact is also lining up to evaluate the EU. Meanwhile, negotiations over the EU’s next multi-year budget period are already well under way, and will set budget ceilings and priorities for development activities from 2014 until 2020.
We are delighted to bring together experts conducting these assessments to debate the following questions:
- What development objectives can Member States better pursue through the European Commission than through bilateral means?
- Does the European Commission live up to expectations?
- What improvements are required?
- What are the implications for future funding?
Places are limited, if you are unable to register but would like to attend please email Siân Herbert on: [email protected]
1. On 25 July 2012, EDCSP hosted an event in the UK Parliament to debate the findings of three recent reports, and also to hear from the Rapporteur in the European Parliament on the new Regulation governing the Development Cooperation Instrument. The three reports were: the House of Commons International Development Committee (IDC) report on 'EU Development Assistance'; the House of Lords Economic Affairs Committee report on 'The Economic Impact and Effectiveness of Development Aid'; and the peer review of EU aid by the OECD Development Assistance Committee(DAC). The discussion was chaired by Simon Maxwell and focused on the comparative advantages of EU development assistance, its challenges, and the implications for future funding. Listen to an audio recording of the event here.
2. Sir Malcolm Bruce, Chair of the House of Commons International Development Committee, highlighted two key problems with the EU aid budget: (1) the significant amount of aid going to Middle Income Countries, like Turkey, and (2) the limited ability the UK has to change this, because of the structure of the EU budget. He objected to the classification of money going to the EU's neighbourhood as ODA and referred to the confusion between development assistance and neighbourhood policy. He did, however, believe that the European Development Fund (EDF) matched and mirrored UK development objectives. On administration costs, although the European Commission had higher costs than DFID, a significant amount of DFID's budget was directed to multilateral organisations, thereby reducing DFID’s admin costs. The Commission also undertook more direct work in many more countries, requiring a greater level of administration. Finally, Sir Malcolm referred to the added value of the European institutions in regions like the Sahel where the UK has no bilateral engagement; and in exerting collective diplomatic pressure.
3. Thijs Berman, Member of the European Parliament and Rapporteur on the Development Cooperation Instrument (DCI), highlighted the EU's potential added value, including its: (1) role as a coordinator and a political player; (2) combined political weight; (3) common objectives, including the rule of law and democracy; and (4) widespread presence. He spoke about the two main EU instruments for financing development cooperation – the EDF (over which the European Parliament has no say) and the DCI (which is co-legislated by the Parliament and the Council). Proposals for the DCI for the next financial period (2014-2020) include focusing aid on poorer developing countries, focusing aid on specific sectors (democracy and governance, inclusive growth, climate change, food security and basic social services), emphasising the role of civil society and addressing cross-regional challenges through the Pan-African programme. As the Rapporteur for the DCI, he an important part of his role was to pin down the Commission and encourage greater focus. In terms of the future, there were three key challenges: (1) keeping policies both national and at the EU level; (2) enabling further blending of loans and grants; and (3) respecting the 0.7% target of GNI for aid. Thijs Berman’s presentation is available here.
4. Karen Jorgensen, Head of Review, Evaluation and Engagement at the OECD Development Assistance Committee (DAC), listed the comparative advantages of the EU that emerged from the peer review, including: geographic reach, scale and scope; a normative role; regional approaches; long-term and predictable representation; its varied streams of funding, particularly in fragile states; experience in large infrastructure projects; use of budget support; perceived neutrality; and collective action and joint decision-making. In answer to the question of whether the EU lives up to expectations, she gave views from the partner countries, the Member States and civil society. Partner countries valued the EU's predictable and long-term support, but criticised its cumbersome procedures and lack of flexibility. Member States criticised the EU's poor capacity, slow response and centralisation at headquarter level. Civil society criticised its complex procedures and inflexibility. Karen Jorgensen mentioned that it is more difficult to deliver on the expectations when the issues are political, for example, achieving the 0.7% target or division of labour. She highlighted that the EU is not as effective as it could be and that the emphasis seemed to be on financial accountability rather than achieving results. She listed three improvements that are needed: (1) clarifying roles (in particular the European External Action Service); (2) streamlining instruments and procedures; and (3) devolving more decision-making to delegations. Karen Jorgensen’s presentation notes are available here, and a summary of the findings of the OECD-DAC peer review are available here.
5. Lord Hollick, member of the House of Lords Economic Affairs Committee, talked about the challenges the Committee faced with the report. He said that it was extremely difficult to evaluate the impact of aid, illustrated by the very wide range of views that emerged from the research. He referred to the findings in the report, that found: little evidence to prove that aid has increased the GNI of developing countries; private sector investment has a much greater impact than aid; and technical assistance is of particular importance. He expressed concern with the high degree of opaqueness of multilateral agencies. With regards to EU aid, he criticised the significant amount of money going to accession countries (which are Middle-Income Countries), rather than poorer developing countries. He expressed dissatisfaction with the level of transparency of EU aid. He also criticised the use of budget support, which he linked with risks of corruption and capital flight. He concluded by praising DFID, which scored highly in the report, and by disagreeing with the 0.7% target, which has encouraged a focus on the amount of development funds disbursed, rather than the results.
6. In the discussion that followed, a show of hands revealed that a slight majority of participants felt that a higher percentage of Member States' aid should go through the European Commission, as opposed to keeping the amount the same or reducing the amount. Participants raised the following issues: the problem of absorptive capacity; the lack of transparency and information on EU programmes; the benefits of technical assistance; the UK's position on joint programming; and the political weight of the EU with regard to aid conditionality.
7. Budget support. Lord Hollick presented strong views against the use of budget support, saying that it can be corrosive to democracy and accountability and that it is difficult to track where the money goes. The rest of the panel were more in favour of budget support, particularly sector budget support, which has much higher levels of accountability and is easier to monitor. Sir Malcolm Bruce said that one reason why donors are using budget support less is because more development funds are being directed to fragile states, which are not generally appropriate climates for this modality. He continued to note that budget support is an ideal instrument in certain contexts – for example in Ghana which is now in a position to manage funds received through budget support and to manage division of labour of donors. Thijs Berman said that budget support is an effective instrument which strengthens partner countries’ administrative capacities, which is key to improving development outcomes. He continued to note that it must be accompanied by donor support to national parliaments and civil society – as both are essential to monitor funds administered through this modality.
8. Political conditionality. The panel discussed whether stricter political conditionality of aid, particularly with budget support, would be an effective way to improve development outcomes. Thijs Berman noted that the EU is better placed than Member States to play a political role, and he supports the new focus on political conditionality outlined in the new development strategy An Agenda for Change. In particular, Thijs Berman explained how in Afghanistan, the EU is investing in reconstructing the national judicial system.
9. Joint programming and division of labour. The panel recognised the political difficulties of strengthening joint programming between member states. Thijs Berman said the EU should not just be the 28th donor, but that joint programming should start with better alignment of common goals and objectives in development policy. Thijs Berman asserted that the EU has the capacity to add value as a political actor rather than a technical actor. Sir Malcolm Bruce noted that donors’ resistance to joint programming is sometimes a form of protectionism. Karen Jorgensen highlighted that donors are generally sceptical of budget support and joint programming, as both entail a loss of power.
10. To conclude the meeting, panellists were asked to summarise their priorities for improvement to EU development cooperation. Karen Jorgensen said she would like to see better trained staff and more based in the field. Thijs Berman proposed that the EU should use its joint strength better and act as a joint actor with a rights based approach. Sir Malcolm Bruce and Lord Hollick both noted they would like to improve the poverty focus of the EU’s development programmes and would like to see a better link between humanitarian and external affairs.