Aid Transparency for Aid Effectiveness
Lack of transparency in aid is no big news, but rather a given when discussing development. Building on a long term process to improve the effectiveness of official aid, the aid transparency movement began with the High Level Forum on Harmonisation in 2003, and took a big step forward with the Paris Declaration on Aid Effectiveness in 2005. After almost five years, what are the results?
At a latest discussion hosted by Global Economy and Development at Brookings Institute and Publish What You Fund, the state of aid transparency was discussed. Karin Christiansen, the Director of Publish What you Fund, noted the results of Aid Transparency Assessment 2010. The three major findings after the assessment of 30 aid agencies revealed that:
- There is lack of comparable and primary data
- There is wide variation in levels of donor transparency, across different type of donors
- There is significant weaknesses across indicators
Christiansen pointed out the need for a common standard for transforming more information into better information. Enlightening on the seriousness of U.S government towards aid transparency, Ruth Levine, Deputy Assistant to the Administrator, Bureau of Planning and Learning at the USAID, mentioned that transparency is not a new concept, however the magnitude of sharing information and significant decrease in cost of sharing information is indeed new. The agency is in the process of creating an easy to use dashboard www.foreignassistance.gov to avail country specific information on USAID budget spending. She also mentioned USAID is in the final stages of developing performance evaluation system that will enforce transparency, stressing that USAID welcomes international donors in the creation of common standard to reduce transaction cost all around.
Nancy Birdsall, President of Center for Global Development, noted that US fairs very low in terms of data transparency, pointing out USAID stands 22nd out of 31 donors in CGD research. She mentioned that the situation on aid transparency is at a “kindergarten” stage and that US has not yet joined International Aid Transparency Initiative (IATI). Adhering to Nancy’s argument, Daniel Kaufmann, Senior Fellow in the Global Economy and Development Program at Brookings Institute mentioned that it is important to understand what constitutes fully transparent development agency. He noted that because of the tendency to focus just on aid projects, and on general and upstream financial information, the detailed financial disbursement information is often not disclosed. He agreed that though transparency is in the beginners stage, it is a good start and more focus should be on improving on existing indicators and caution should be given against over interpreting results, grade inflation, and undue focus on aggregates. Sharing his thoughts on aid transparency, Liberian Minister of Finance, Augustine Ngafuan noted that from a developing country’s government perspective, lack of data on donor transparency makes it difficult to decide on national development plans and strategy. He also pointed out the need for specific aid management unit and aid database in recipient countries government to understand the accountability of aid.
Recent policies from the donors indicate a willingness to make more data available. PEPFAR’s Five-Year Strategy sites “working to expand publicly available data” as a key initiative and the World Bank’s recently announced its Open Data, Open Knowledge, Open Solutions. This is certainly a start, and more work is still needed to enhance donor transparency and the effectiveness the recipient governments’ spending of aid.