Lessons from ReCom in a post- 2015 perspective
Let’s consider… • What has worked and could be scaled up in the allocation, design and implementation of aid post- 2015? • What has not worked and could be improved? • Can we identify key opportunities to use aid more effectively to help achieve inclusive growth and effective, open and accountable institutions for all? • What are the critical trade-offs and possible tensions in aid relationships?
ReCom – Points of Departure How effective is aid? • • Multiple goals for aid + country variety • Delivery of aid is complex – many actors Aid is just one element of development • • Community action, private sector, state-building Many bold statements – but nobody can speak with authority on • every facet of development, nor aid • ReCom – Research & Communication in Foreign Aid Large network: 300+ people from 60 countries (since no single • person knows everything about aid)
http://recom.wider.unu.edu/
ReCom – Aid Analyzed under 5 Themes • Social Sectors • Growth & Employment • Governance & Fragility • Gender Equality • Environment & Climate Change All relate to the MDGs & the post-2015 development debate. Today focus on first three. Will assume clear that aid needed to support gender equality and with reference to climate change.
Aid & Social Development Health Care, Education, Water & Sanitation, Social Protection
2.6-3.0 million fewer under 5 child deaths annually Reduction in global U5MR by disease, 2000 to 2010 Deaths per 1,000 births 73 3 >30% decline from 2000 to 2010 20-30% decline from 2000 to 2010 ~50% of the reduction 3 <20% decline from 2000 to 2010 comes from pneumonia, 3 diarrhea, and measles 2 1 1 1 1 1 1 1 0 0 0 0 0 57 2000 Preterm birth Neonatal sepsis/ Neonatal Pneumonia Diarrhoea Measles complications Intrapartum related events Other conditions AIDS Meningitis Neonatal Tetanus Malaria Neonatal Pneumonia Other conditions neonatal meningitis diarrhea Congenital abnormalities injury 2010 SOURCE: CHERG 2012, Lancet 2012
Aid to Social Sectors Aid to Social Sectors Aid to Social Sectors as % of total aid flows (billion USD constant 2010) 30 20 25 Education Education 15 20 15 Health 10 Health 10 Water and 5 5 Sanitation 0 0 1971 1976 1981 1986 1991 1996 2001 2006 2011 1971 1976 1981 1986 1991 1996 2001 2006 2011
Aid is effective in social development • ReCom shows that: an annual inflow of aid of 5% of GDP: • Augments schooling (enrolments up, but quality problem remains) • Helped reduce infant mortality by 7 per 1000 births • Reduced poverty BUT depends on inclusiveness of growth • Many innovative & successful interventions – but problems too (e.g. in Global Fund to Fight AIDS, TB and Malaria) • & too many children are still hungry & unschooled (especially girls)
Aid & Economic Development
Economic Growth: ReCom finds: • Over the long run, aid inflow of US$ 25 per capita adds an additional 0.5 percentage point to annual per capita growth (incl. by raising public investment) • Impact is cumulative – e.g. nourishing a child today has a growth impact later • By investing in an economy’s supply-side – aid can avoid Dutch Disease • Helps reconstruction – e.g. Mozambique, Uganda (BUT aid cannot do the job of peace-keeping alone e.g. Afghanistan, south Sudan)
UN High-Level Panel report on the post- 2015 development agenda • Calls for: • “..A quantum leap forward in economic opportunities and a profound economic transformation to end extreme poverty and improve livelihoods…” • How can aid help? • Aid to social sectors builds human capital BUT being educated & healthy is not enough
What will happen to aid allocation post-2015? 45% Social Sectors 40% 35% 30% Economic 25% Infrastructure 20% 15% Production Sectors 10% 5% 0% 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
Aid, Governance & Fragility
Build state capability to ‘deliver like a state’ not just ‘look like a state’ Think of aid as helping to address needs that states alone cannot. • If aid works, it should become obsolete… • Avoid creating incentives for states to look like states, without delivering like them A capability trap characterizes many states with stagnant or • declining capacity • What to do? Adopt a new approach: Problem-driven Iterative adaptation (PDIA) – PDIA has four principles: it is problem driven; it authorizes positive deviation into the design space; it adapts using experiential learning; and it scales up through diffusion.
Fragile states and situations call for special focus • 1.5 billion people, furthest away from achieving the MDGs • And extremely weak state capability and legitimacy. • We often focus on special approaches for ‘fragile’ vs. not fragile states, but also remember that fragility and poor governance are two sides of the same coin. • Diverse experiences with aid for governance reform should inform work on fragility – as we show in ReCom.
Legitimacy is a core component of building effective states • UN High-Level Panel report on the post-2015 development agenda calls on us to: – “Build peace and effective, open and accountable institutions for all.”
Donor support for democratic governance in Africa is also increasing
Aid has supported democratic transitions • See Democratic Trajectories in Africa: Unraveling the Impact of Foreign Aid (Resnick & van de Walle 2013) • Build on these experiences: assistance for elections, political parties, strengthening legislatures, civil society, the rule of law • Also think outside the box: tax reform and state- building • Remember too that aid can have negative effects on local legitimacy
Nearly concluded: building bridges
Remittances help build this:
But we also need to build this:
Climate change could overwhelm development
MDGs & Post-2015 Aid helps economic growth (overall). BUT: • • To achieve the HLP ‘quantum leap’ it must support: • Structural transformation – industrial policy & don’t just focus on SMEs (“East Asia’s donors do it better?”) Creation of ‘good jobs’ – donors pay too little attention to employment – • fragmented livelihood projects State capability and legitimacy – support domestic capability and legitimacy to • deliver like a state, not just look like a state Gender equity at scale – rhetoric, but too-small-scale • • Aid to agriculture – slumped & still too low (esp. crop research). IFAD & AfDB ‘going to scale’ • Infrastructure – use aid to leverage private capital (e.g. AfDB Africa50 fund). Recall Climate change challenge
Aid & Gender Equality No inclusive growth if it does not fully incorporate ability of • citizens, regardless of gender • DAC has monitored commitments to gender equality since 1991 – about 15% of all screened aid pursues the objective ReCom concludes that 15% is too low • • Highest in education: 30% of all screened aid. Health mixed: maternal health now a high priority but family planning too low Aid for gender equality languishes in productive sectors: in • agriculture aid for gender equality fallen to 15% • Small livelihood projects; little at scale
Conclusions: Is the aid job done?
Need: research not rhetoric • Ask an engineer: do bridges work? • Bridges work - when well-designed & built • Ask a development expert: does aid work? • Aid can work – when well-designed & implemented • Instead of rhetoric – nothing works in development, nor in aid, & we can never know what works & why (= “all bridges fail, & will continue to fail”)… • … find out: what works? What could work? What is scalable? What is transferrable?
www.wider.unu.edu Helsinki, Finland
Let’s consider… • What has worked and could be scaled up in the allocation, design and implementation of aid post- 2015? • What has not worked and could be improved? • Can we identify key opportunities to use aid more effectively to help achieve inclusive growth and effective, open and accountable institutions for all? • What are the critical trade-offs and possible tensions in aid relationships?
Net Official Development Assistance (disbursements in constant prices 2010) 160 Total ODA Bilateral Multilateral 140 In 1960, 36.4 billion 120 USD of aid allocated. 100 Billion USD By 2011 aid flows 80 had multiplied by 60 four to 146 billion 40 USD per year 20 0 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Financial flows to African countries 250 20% 18% Remittances Current USD, billion 200 16% 14% 150 12% Official Development % GDP 10% Assistance 100 8% Portfolio investments 6% 50 4% 2% Foreign direct 0 0% -2% investments -50 -4% % GDP 2000 2002 2004 2006 2008 2010 2012 2014 (p) 31
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