BRUSSELS, 16 October 2012: The donor trend of making poorer countries earn overseas aid by achieving set targets before the funds are provided often does little to improve the impact of the assistance, the development network Eurodad says in a new report.
As the European Union debates its new long-term budget, the success of its Millennium Development Goals Contracts (MDG-C) is a good reason why the EU should continue its ambitious aid programme and remain the world's top aid provider.
The MDG-C fares best in the report’s rigorous assessment of the six major international relief initiatives that use a results-based aid approach, but significant problems are found with several of the others. They have failed to effectively improve local ownership, increase donor and recipient accountability, build on national policies, or significantly develop local procurement systems.
"The strengths, weaknesses and impacts of different results-based approaches are really not clear", says Javier Pereira, the author of the report. "So it seems reasonable to use results-based approaches with some degree of caution".
The 27-page report - “Hitting the Target? Evaluating the Effectiveness of Results-based Approaches to Aid” - examines the trend of making aid disbursements conditional on results to ensure value for money as pressure on budgets mounts due to the global economic crisis. It warns of the expense of monitoring and verification mechanisms to prove that results are being achieved.
Eurodad advises donors to conduct an aid impact assessment and only to opt for a results-based system if it will meet the needs of recipient governments, parliaments and civil society. Together, they should lead the design and coordination of the intervention. Donors must be wary not to undermine country systems or democratic processes.
Donors should also ensure that the results they impose are not based on controversial assumptions, such as adopting fully liberalised trade policies. The programmes, too, must be made predictable and sustainable by leaving sufficient time between the assessment of progress and the payment of funds. The intervention must not create aid dependency.
In addition, financial management and procurement should be handled by the recipient where possible, and if that is not possible help must be provided to strengthen the country's own systems, rather than create parallel structures.
"There is very little reliable information about the links between results-based approaches and aid impact", says Javier Pereira "Until there is, it is wise to use them sparingly and keep the aid effectiveness agenda in mind, lest we fall back into bad old habits".
The report, “Hitting the Target? Evaluating the Effectiveness of Results-based Approaches to Aid”, is available at: http://eurodad.org/1543793/; you can also download the report directly at: /files/integration/2012/10/Hitting_the_target.pdf
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