Quantity vs. Quality: Rethinking ODA

The UK has met its .7% Official Development Assistance (ODA) target for 2013, but from the limited coverage of this issue you would never know. Britain barely advertised this huge accomplishment, only sending out a single tweet of acknowledgement. The UK is just one of 7 countries currently meeting the ODA requirement set by Development Assistance Committee (DAC) countries in 1969 and it is the first of the world’s largest economies to do so. The other countries include Norway, Sweden Luxembourg, the Netherlands, and Denmark. By comparison, the US only uses about .2% of its GNI on foreign assistance programs. The timing of the UK achievement is interesting considering the recent criticism of the country’s Department for International Development (DfID).

imgresDfID is the primary channel through which UK ODA flows. It is responsible for almost 88% of UK ODA.  But just last week the Independent Commission for Aid Impact, a watchdog agency evaluating DfID learning strategies, gave the UK agency an “amber-red” rating for its ability to research and apply its findings to foreign assistance programs. The report criticized DfID for poor returns on investment and emphasized the organization’s inability to translate research into effective action. This creates the notion that the UK could achieve the same development goals at a much lower cost if it were to employ more effective investment strategies.

The UK’s interesting situation is a stark reminder that quantity does not ensure quality in development assistance, and begs the question of which is most important for development: the quantity of foreign assistance or its quality? A higher quality means greater returns on investment, but a higher quantity means a larger investment overall. It seems, however, that by increasing the funding for an ineffective organization, the UK is wasting an opportunity to more effectively use its high ODA level but the achievement of reaching the .7% of GNI achievement masks the underlying organizational problems.

It is difficult to deny the benefits of ODA quotas. ODA quotas hold countries accountable for their continued foreign assistance. Bilateral development assistance relies on ODA, and because of the OECD agreement from 1969, developed nations have a mutual obligation to maintain a substantial foreign assistance program. By setting the quota as a percentage of GNI, each country has a high, yet attainable goal to achieve. Even if countries do not reach that goal, just by attempting to do so they contribute a large amount to development programs. The quota also serves the purpose of being an easily measurable target that ideally allows for comparisons across countries. The percentage encourages countries to contribute the same relative amount, creating a sense of equality.

The UK has drastically increased its ODA recently
The UK has drastically increased its ODA recently

The greatest negative aspect, however, of ODA as a percentage of GNI is the measure’s strict simplicity. As demonstrated, the benchmark only demonstrates how much money is spent on foreign assistance. It says nothing about the types of programs and, more importantly, the quality of these programs. Is this foreign assistance money used in the most effective way or in the areas in most dire need of assistance? It allows countries to abuse the ODA system. Countries are already under fire for suspicious ODA practices. A recent post on this blog highlighted how countries use ODA as a way to turn a profit often at the expense of a developing nation. Simply setting a high ODA target for developed nations without addressing organization issues could further contribute to this problem.

Has the age of ODA quotas come to an end? It might be time to move away from a system of ODA targets as a percentage of GNI. Development work is all about the quantifiable measures. Perhaps it is time the development community creates a quantifiable measure for ODA quality instead of merely the quantity. It is not enough for developed nations to merely donate a portion of their GNI, especially when that money is not funneled to effective development programs.

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