Just in Time for Busan: New Measures of Aid Effectiveness

This is a joint post with Rita Perakis.

Late this month representatives of donor and developing country governments, civil society organizations, think tanks, and the private sector will meet in Busan, South Korea, to review progress since the signing of the Paris Declaration of Aid Effectiveness in 2005. Rita and I will be among them and we hope, along with many others, that the Busan High Level Forum on Aid Effectiveness will mark a milestone of sorts, where the aid effectiveness movement, drawing on the consensus forged at previous meetings in Rome, Paris, and Accra, turns from words to action.

As a nudge in that direction, the Center for Global Development and the Brookings Institution offer a newly updated quantitative assessment of how well donors are living up to their aid effectiveness commitments. CGD is releasing today the second edition of the Brookings-CGD Quality of Official Development Assistance (QuODA) assessment. Brookings senior fellow Homi Kharas and I designed QuODA as a ranking of donor countries and agencies according to four dimensions of aid quality that draw upon international declarations: maximizing efficiency, fostering institutions, reducing burden, and transparency and learning.

Using 31 quantified indicators applied to the four dimensions, QuODA finds mixed but overall slow progress, consistent with the qualitative conclusions of the OECD's report on Progress in Implementing the Paris Declaration. For indicators, QuODA draws upon the OECD Development Assistance Committee's Creditor Reporting System data as well as the 2011 Paris Monitoring Survey data, offering a detailed analysis of donors' performance.

In this year's QuODA we present a snapshot of donors' performance in 2009-10, and analyze changes in performance since we published the first edition of QuODA last year. Major findings:

  • IDA, Ireland, and the United Kingdom score in the top ten in all four dimen­sions.
  • Most (though not all) donors score in the top half on at least one of the four dimensions, suggesting that everyone has good lessons to share. Most donors score well below the bottom half on at least one dimension, suggesting all have room for improvement.
  • Multilateral agencies perform better than bilateral agencies on average. In three of the four dimensions, the best-in-class agency is a multilateral. On the other dimension, fostering insti­tutions, smaller bilateral donors are at the top, namely Denmark and Ireland.
  • The largest donor, the United States, does badly. It is among the bottom six in three dimensions, but does make the top half in transparency and learning.
  • Significant, although small, improvement has occurred in all dimensions except maximizing efficiency. The most improvement has been in the transparency and learning dimension, mostly because of greater commitments to transparency.
  • Donors' biggest improvements have been in their share of aid allocated to countries with good operational strategies and good monitoring and evaluation frameworks. As recipient countries have improved these systems, donors have responded by allocating more of their aid to them. But changes have been less significant on donors' use of country systems, reporting of aid on recipient country budgets, and predictability of aid.

While the Paris Survey has already shown that donors mostly failed to meet the targets they set in the Paris Declaration (as Owen Barder points out), QuODA drills deeper, identifying specific areas of relative strength and weakness, for countries, major bilaterals, and individual aid agencies.

We think QuODA is a useful tool to determine how well donors are implementing the ideas they agreed to in Paris, and to benchmark agencies against each other and over time. The more stakeholders inside and outside the aid system plumb its depths, the more useful it can be in providing a serious basis for getting beyond marginal to dramatic improvement.