A farewell to DFID and welcome to a new Foreign, Commonwealth and Development Office

With a weakly argued statement to parliament, Boris Johnson has enacted one of his dreams, removing the Department for International Development (DFID) and merging it into the Foreign and Commonwealth Office (FCO) to create a super Whitehall Department briefly termed as the ‘Foreign Commonwealth Development Office’.

DFID’s history has been written by a good range of sources, some gated due to academic journals, others free to read such as: Owen Barder’s article Reforming Development Assistance: Lessons from the UK Experience or Barrie Ireton’s book, Britain’s International Development Policies: A history DFID and Overseas Aid or parts of Clare Short’s – Short was the inaugural Secretary of State for International Development – book An Honorable Deception? New Labour, Iraq and the misuse of Power.

Back to the debate, Johnson was a nice debater but one with terrible facts. Below are excellent comments by opponents of the merger. All of them are of course MPs:

Clive Efford : “but back in 1994, when that dividing line did not exist, we ended up with the Pergau dam scandal”

Mary Kelly Foy: “What ​consultation did the Government carry out with humanitarian and development experts, as well as leading aid organisations, before the decision was made?”

This view was furthered in a Devex although there was a mention of consultation on twitter.

Carol Monaghan”:”DFID has funded outstanding research projects with partners in the developing world.”

Stephen Crabb: “I always remember Malcolm Bruce, the former Chair of the International Development Committee, saying, “The thing about DFID is that it’s not as good as it thinks it is, but it’s nowhere near as bad as its critics say.”

Of course, the media quickly published articles on Johnson’s move and speech. The Times picked up on one part of his speech, “We give as much aid to Zambia as we do to Ukraine, though the latter is vital for European security” – aid to Ukraine is not ODA! ODA, or Official Development Assistance is ‘aid’ for least developed countries and Ukraine is not one of them while Zambia is. The Times article further states “The merger is said to have the backing of both permanent secretaries at the Foreign Office and DFID” – There is no permanent DFID Permanent Secretary at present; Nick Dyer is only acting while Sir Simon McDonald is permanently in place. Interestingly, McDonald used to be a DFID Perm Sec, so it is very strange he would have agreed with a DFID-FCO merger. Another lie from Mr Johnson?

The anger over this merger or elimination is still raging in the media and social media. One key reason why is DFID’s excellent performance in producing outcomes and ensuring almost no levels of corruption, contrary to public opinion. You can view ICAI’s report on DFID’s work, published just in 2019, here. Another strong reason for the anger is the secrecy over this move, although many would have expected it. Boris Johnson paused his ‘comprehensive’ Integrated Review due to the COVID-19 outbreak yet he announced this merger without even publishing the whole Integrated Review. Secretary of State Anne-Marie Trevelyan never reported in her evidence to the House of Commons International Development Committee on this merger and in fact agreed that separate DFID and FCO Secretaries would be best, although it is reported on twitter she knew her job would not last for very long.

DFID, across its 23 years of existence, is not perfect. Under the Labour Party, it produced for white papers and since its 2010 White Paper, the subsequent White Papers propose UK development and ODA to be centred around neoliberal, free-market policies instead of inclusive policies to improve development. DFID has not had a stellar record in its work in conflict states. UK ODA under DFID has mainly been used for ‘quick-wins’ or rather targets like x number of mothers saved from still birth, y number of girls in school or its best, z number of people vaccinated. That is short-term development, not long term. In a wider-lens, the UK should not be fixated on the 0.7% aid target, which is outdated and forced this merger.

I could ramble one but now move to questions for this new department, with a weird acronym FCDOFF – don’t laugh.

1) Will the UK still provide foreign aid as in aid for national security purposes or still ODA?

A department, under Dominic Rabb, the Foreign and Development Secretary or whatever new title, will be as stated, use ambassadors as the in-country judge for providing UK development aid. UK aid is legally protected as ODA based on the International Development Act 2002, the International Development Act 2002 (Commencement) Order 2002 and the International Development (Reporting and Transparency) Act 2006. With this new department, the contents of these legislations with have to change but more importantly, will UK aid always be for the purpose of development or, with a foreign-policy oriented secretary and team, now be for political and national security means first, development second?

2) Will UK aid or ODA will remain as effective and transparent as it has been since 1997? I say effective because OECD peer reviews applaud the DFID Cabinet-level and independent ministry model while do not place such praise on other OECD-DAC donors-again another lie Boris Johnson makes. Transparency is also another talked about issue. NGO campaigners and organisations like the OECD and other donors look up to DFID as a model for transparency and accountability. A foreign-policy centred department, already that of the current FCO, will unlikely wish to make all of its external financial assistance known to all, often citing security interests.

3) On the multilateral front, it will be messy. DFID’s independence means its Secretary of State sits on the World Bank’s Board of Governors while his or her counterparts often are the finance minsters or foreign ministers, not development-centred politicians. With this new department, will the UK head back to the past, posting the Foreign Secretary or the Chancellor of the Exchequer to the World Bank, a key deveelopment organisation?

4) What will the global community say, after praising DFID for years of excellence in development delivery, research and organisation as opposed to other models? Given the criticisms of merging development departments into foreign ministries, see this great ODI report, will the global community–not just other countries but communities and international organisations–look up to the UK? The OECD has constantly praised the UK model for development, aid and DFID as a whole, what will it say now with this merged foreign policy department?

The Westminster system allows the reigning party in the House of Commons to enact changes and laws with the opposition only to oppose by debating and voting. This end of DFID — it is an end whatever Johnson says — brings up uncertainty and conflict.

Update: The House of Lords debated the PM’s speech on 18 June. A very well-knowledgeable debate.

The Rule-Based International Order: Discourse and Reality in East Asia (short version)

The rule-based international order or the liberal international order, has recently garnered increasing attention recently. This post-World War II order is generally defined as a free open market, trade and liberal globalization system. Such an order has been argued to successful develop countries economically and socially, create global prosperity and ensure peace. In recent years, politicians, analysts and academics fear this order is under attack with the rise of national ideologies and governments with isolationist economic policies. There is a projected fear that the opposition to this ruled-based order will adversely affect political and economic achievements in regions like East Asia. I present a history of East Asian development different from the discourse of the liberal international economic order, and that the worry the order is under attack should be approached.

Different approaches to East Asian development

The history of East Asia development has been often depicted in two versions. The main discourse depicts East Asian countries with open, free market economies, minimum government regulations and willing to enact free trade agreements. The governments of the East Asian Tigers, namely Singapore, South Korea, Japan and Taiwan, intervened in their economies only to provide market-friendly policies. It was this form of development which resulted in extremely high economic growth, documented in reports such as the World Bank’s 1993 report,The East Asian Miracle: Economic Growth and Public Policy.

The other school of thought argues that rapid East Asian development was rather a result of active government intervention and investment in national economies. These governments spent on building national infrastructure, social services such as education and transport. These governments did endorse foreign investment and trade, but judiciously enacted tariffs and subsides to ensure local companies could develop before competing with multi-national companies. This perspective has been argued by institutional economists such as Ha-Joon Chang in his 2007 book “The East Asian development experience: the miracle, the crisis and the future”.

The impact of the discourse of the liberal international order

There has constantly been a debate between both sides how East Asia successfully developed. We can infer from the above that, firstly, the free market, liberal globalization approach mirrors the characteristics of the rule-based, liberal international order which allegedly is under attack. Second, with the worry that the liberal order is under attack, the government intervention approach has largely faded from the scene. The international order is therefore framed as the means to successful East Asian development and extrapolated as a core development template for countries to follow. Those that posit that the international order is being challenged recently also warn countries not enact protectionist policies like tariffs, reduce government intervention and allow the more private sector initiatives and leave the market economy to itself. In effect, countries are informed not to follow the active government intervention approach school of thought.

While the private sector and market economy are drivers of economic growth, the absence of any government intervention would adversely affect countries, especially those with at lower stages of development. Fixed open trading rules would also place the local companies in developing countries on an unequal playing field with foreign companies. A contemporary example is the cancelled Trans-Pacific Partnership free trade agreement, which aim further reduce tariffs and government controls for services across the Pacific region. While this may boost economic growth, it would have exposed East Asian indigenous companies to unfair competition with larger foreign firms from developed countries.

Moreover, there has not been any fixed ‘rule-based’ economic order. Leaders in developed countries or regional bodies like the United States and the European Union have warned countries not to enact tariffs. Yet, as Joseph Stiglitz and Andrew Charlton noted in the book “Fair Trade For All: How Trade Can Promote Development”, published 2005, developed countries historically enacted their own tariffs to prevent developing countries from exporting agricultural products. Developed countries have also historically imposed strict intellectual property rights, again preventing pharmaceutical firms in developing countries from gaining knowledge and entering the market.

This is not to argue for constant government intervention or for countries to embrace tariffs and inward-looking economic policies. It is not to argue that the private sector and a market economy is detrimental to development or economic growth. To the contrary, it shows that there is not a unitary liberal international order that should retained and not challenged. It indicates that there is some hypocrisy with those arguing to preserve the international order while not adhering to the rules themselves. In sharp contrast, carefully targeted government intervention in the economy would in fact allow East Asian developing countries to successfully develop as opposed to the proponents of the rule-based international order.

Towards an East Asian future with the liberal international order discourse

Today’s Asian Tigers have open market economies, have large external economic investment and have open free, low or zero-tariff trade agreements. Nevertheless, these developed countries still do require strong government-led interventions to sustain their individual economies. Governments also, as Ha-Joon Chang argues, ideally should o spend on social welfare systems to prevent workers from financially suffering from any external economic shocks. East Asia and other regions also have the burden to forge equitable development as highlighted in the Sustainable Development Goals or SDGs. These goals again require judicious government spending in the economy, infrastructure and other public sectors. This again is in contrast to the tenets of the whole order.

The rule-based liberal international order, while allegedly being challenged, is more of a discourse rather than a blueprint for economic growth and success. Rather than following its discourse or lamenting about its impending downfall, East Asian countries should recall its history and work with government and private sector policies for successful economic development.

DFID only spent 72% of UK official aid last year. Does that matter?

Post by Phil Vernon.

Phil Vernon

The UK Government released its data on 2017 official development assistance (ODA) spending today. As required by law, the total went up to match 0.7% of the UK’s GNI, reaching £14.1 billion, an increase of 5.1% over 2016. The UK was the third largest ODA donor in 2017, some way behind Germany and giving just over half of what the USA provides. Sweden, Luxembourg, Norway and Denmark are the other four governments which meet the 0.7% target (a target I have long questioned, and I was against the idea of making it a legally binding in the UK).

Predictably, there is already some criticism about the proportion of this money being spent by DFID and other departments. And I expect there to be more – just as in previous years. The proportion DFID spent has gone down from 88.6% in 2013 to 72% last year. Other departments spending…

View original post 1,001 more words

Spotlight on the UNDG

There are several dozen agencies across the United Nations (UN) system. Most of them have a specialised agencies like the United Nations Children’s Fund (UNICEF) or the World Food Programme (WFP). There are some well-known UN Funds and programmes such as the United Nations Development Programme (UNDP) and the Office of the UN High Commissioner for Refugees (UNHCR). What is lesser known the larger consortium, the United Nations Development Group (UNDG).

History
The UNDG arose as a result of UN reform. The UN, like so many multilateral organisations, required reform in order to meet the demands of its member states, especially the US and to some extent, the UK. By 1997, there were calls within the United Nations and to draw all UN agencies working on development issues together. Many UN Development Programmes and Funds and Specialised Agencies were encroaching upon each others activities. The then Secretary General, Kofi Annan, publish a paper known as Renewing the United Nations: A Programme for reform (if you can’t view the link, google the title or ‘UN document A/51/950’). More support came from Surapong Posayanond, the then Director General of the Department of International Organizations from the Ministry of Foreign Affairs of Thailand in merging UNDP, UNICEF, UNFPA and WFP together (M2 Presswire, 1997).

If you skip through the document above and paragraph 73 explains the formation and objectives of the UNDG, namely: to facilitate joint policy formation and decision making amongst the various UN agencies and programmes, encourage programmatic cooperation and reduce any management inefficiencies. The UNDG would integrate all programmes into the United Nations Development Assistance Framework (UNDAF). Finally, then Secretary General Kofi Annan worked to form the UNDG and won praise from then UNDP Administrator, James Speth (Xinhua News Agency, 1997). There are also several non-Internet based sources covering the history of the UNDG, namely:

Murphy, C.N., 2006, The United Nations Development Programme: A Better Way? Cambridge: Cambridge University Press, p.290 and the rest of the chapter.

Kinggebiel, S., 1991, Effectiveness and Reform of the United Nations Development Programme (UNDP), London, Frank Cass, various pages including p.ix, 93, 130 (about coordination), 275, 297 (about UN development cooperation), 30.

Riddell, R.C., 2007, Does Foreign Aid Really Work? New York: Oxford University Press, p.82, 88

Stokke, O., 2009, The UN and Development: From Aid to Corporation, Indiana: Indiana University Press, p. 401, 403, 405-406, 424

There are a host of other books and reports detailing the rise of the UNDG, but they aren’t in my possession.

Membership

The following are the UNDG members:

Members of the UNDG
* The UNDP (The largest of all and lead organisation)
* The UNICEF
* The United Nations Population Fund (UNFPA)
* The WFP
* The Office of the High Commissioner for Human Rights (OHCHR)
* UN Women, formerly the United Nations Development Fund for Women (UNIFEM)
* The United Nations Office for Project Services (UNOPS)
* The Joint United Nations Programme on HIV/AIDS (UNAIDS)
* The UN Habitat United Nations Human Settlements Programme (UN-HABITAT)
* The United Nations Office on Drugs and Crime (UNODC) – (note: not listed in current website, could have been removed as a UNDG member)
* The World Health Organisation (WHO)
* The United Nations Department of Economic and Social Affairs (UNDESA)
* The International Fund for Agricultural Development (IFAD)
* The United Nations Conference on Trade and Development (UNCTAD)
* The United Nations Educational, Scientific and Cultural Organisation (UNESCO)
* The Food and Agriculture Organisation (FAO)
* The United Nations Industrial Development Organisation (UNIDO)
* The International Labour Organisation (ILO)
* Any of the United Nations Department of Public Information (Regional Commissions (UNDPI): The United Nations Economic Commission for Africa (ECA), the United Nations Economic Commission for Europe (ECE), the UN Economic Commission for Latin America and the Caribbean (ECLAC), the UN Economic and Social Commission for Asia and the Pacific (ESCAP) or the UN United Nations Economic and Social Commission for Western Asia (ESCWA) – these rotate annually) – (at present (2018) it is ECLAC https://www.cepal.org/en)
* The Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries & Small Island Developing Countries (OHRLLS)
* The Special Representative of the Secretary-General for Children and Armed Conflict (SRSGCAC)
* The United Nations Environment Programme (UNEP)
* The UHCR
* Thee Office of Under Secretary General – Special Adviser on Africa) (UNOSAA)
* The United Nations World Tourism Organization (WTO)
* The World Meteorological Organisation (WMO)
* The International Telecommunications Union (ITU)

Observers

(see this 2015 Functioning and Working Arrangements paper for who can be considered as a UNDP member an observer also see this archived link from 2009, stating the list of observers
* The World Bank or World Bank Group (not exactly specified which)
* The United Nations Fund for International Partnerships (UNFIP)
* The Office for the Coordination of Humanitarian Affairs (OCHA)
* Spokesman for the Secretary-General
* Director, Office of the Deputy Secretary-General of the United Nations

Note: Again, you have to see the link above to understand which UN specialised agency or fund or programmes are considered as UNDG members and which are considered UNDG observers.

Leadership and Organisation

The UNDG has a chair, the Deputy Secretary General of the UN, and a vice chair, the Administrator of the UNDP. (Previously, the UNDP Administrator was simply the chair of the UNDG.) There is also a core group consisting of “[UN}DESA, FAO, ILO, UNDP, UNFPA, UNHCR, UNICEF, UN Women, WFP, WHO executives, the rotating chair of the Regional Economic Commissions, and the chairs of the UNDG Strategic Results Groups.” (I’m not exactly sure what the ‘UNDG Strategic Results Groups’ are but you can via this Google search link or this UNDG link on UNDG working groups. Previously, there was the UNDG executive committee which comprised of the four founding agencies–the UNDP, the UNFPA, the UNICEF and the WFP with Office of the High Commissioner for Human Rights an Ex-Officio member of the Committee (See Stokke, 2009, p.403).

A key component of the UNDG that aids its functions is the  UN Development Coordination Office (DOCO) which acts as the secretariat of the UNDG. DOCO is a key coordinating body that provides “more strategic UN support for national plans and priorities, makes operations more efficient, reduces transaction costs for governments, and ultimately helps people attain the Millennium Development Goals and other internationally agreed development objectives”.) DOCO also greatly assists UN Resident Coordinators (RCs) – the representative that coordinates the work of individual country teams. There have been plans for improving DOCO, allowing it to 1) to have stronger oversight over RCs; 2) monitor and assess each RC’s professional development and performance appraisal; 3)control any trouble shooting regarding regional UNDG officials; 4) provide operational guidance to UN country teams (UNCTs) and quality assurance to the various UNDAFs ; 5)  provide communication support of UN Values and 6) DOCO to be head by a UN Assistant Secretary General.

Besides the leadership described, the UNDG derives its mandate from the Comprehensive Policy Review of operational activities for development of the United Nations system. Furthermore the UNDG is overseen by the UN General Assembly through its Economic and Financial Committee (Second Committee). This committee produces a Quadrennial Comprehensive Policy Review (QCPR) of operational activities for development of the UN system which in turn responds to the mandate defined the General Assembly and the UN Economic and Social Council (ECOSOC). Alongside this, the UNDG is one of the three mechanisms of the Chief Executives Board for Coordination (CEB), the other two being the High-Level Committee on Programmes (HLCP) and the High Level Committee on Management (HLCM) (Note: the CEB website only that CEB has only has two pillars–the HLCP and the HLCM while the UNDG page on its governance claims the UNDG is the third pillar of the CEG.) This positioning of the UNDG is prominent given its youth and its core role as a coordinating body.

Delivering as One and the UNDG

In the wider scope, there is also a plan called ”Delivering as One”. It aimed to explore how the United Nations system could work more coherently and effectively across the world in the areas of development, humanitarian assistance and the environment. It was the result of a report issued by the Secretary General. At the end of 2006, eight pilot countries–‘guinea pigs–were test out for the Delivering as One design. These were Albania, Cape Verde, Mozambique, Pakistan, Rwanda, Tanzania, Uruguay and Vietnam. The UNDG played a key role here leading the design “with the support by Millennium Development Goals strategy support funds”. Delivering as One continues to be a critical topic where the takes the lead; it has set out Standard Operating Procedures, extremely relevant as the international development committee moves towards the 2030 Sustainable Development Goals.

UNDAF(s) and the UNDG

UNDAFs aims to reduce duplication in planning requirements for UN agencies and national partners, and for some agencies to replace the current requirements of the UNDAF and agency-specific country programme planning documents. UNDAP aims to bring together agency specific planning requirements in a consistent and seamless manner, and ensure a ‘necessary and sufficient’ programme logic in the results chain and resource requirements. The plan outlines linkages to regional and global initiatives at the sectoral level, forging greater synergy between UN plans in addition to support of larger multilateral and bilateral programmes. Annual reviews and adjustments ensure the continued relevance of the UNDAP; the plan and its implementation modalities ensure coherence and consistency from actions to results to reporting, yielding a synergistic effect. The UNDAF is closely related to Delivering as One as a result-orientated framework lasting around 3 to 5 years in each UN client state or UN Country Teams (UNCTs).

It defines how UNCTs contributes to the achievement of international development results, based on an analysis/assessment of country needs and UN comparative advantages. Each UNNDAF is a compact between Government and the UN and fosters national ownership through joint identification of strategic priorities, coherent engagement in national and UN coordination processes, and alignment of the UNDAF with national planning cycles. Strategic guidance and oversight are exercised through a Joint National/UN Steering Committee with the participation of national stakeholders.

The UNDAP methodology tried out in several countries, Tanzania being on of them. The methodology was designed based on experiences previous UNDAP cycle, the Delivering as One experience . It was also a response to the recommendations from the Delivering as One Country Led Evaluation. An interim draft of the four-year USD $773 millionUNDAP for Tanzania was approved on 13 December 2010 by the Tanzanian Government’s  Joint Steering Committee (JSC) and United Nations. As part of the UNDAP development, and in line with the agreement reached by UNDP, UNFPA, UNICEF and WFP, a Common Country Programme Document (CCPD) has been prepared and submitted together with agency specific annexes. The CCPD is an extract of the contribution of the four agencies to the UNDAP.

A report in 2016 surveyed host governments and found that the UNDAF has enabled governments to ensure that the UN’s activities are closely aligned with individual national plans and strategies. At present, UNDAFs are further aligned towards the 2030 Sustainable Development Goals, with four programming principles namely: 1) Leave No One Behind; 2) Sustainability and Resilience; 3) Accountability and 4) Human Rights, Gender Equality and Women’s Empowerment. All this goes in line with the Delivering as One approach.

Conclusion
This is mainly an overview of a group, not really an organisation, that is not widely known in development circles. As noted, it is mean to enhance the efficient of UN international development activities, improve efficiency on any UN operations in the field and planning and deliver more efficient results. The UNDG has improved UN development, but as with any large corporation, there’s much more to be covered. I’ll write about UNDG efforts and shortfalls in another post.

References:

M2 Presswire, 1997,  “UN Economic and Social Council reviews operational activities for fostering development”, M2 Presswire, 4 July 1997

Stokke, O., 2009, The UN and Development: From Aid to Corporation, Indiana: Indiana University Press, p. 401, 403, 405-406, 424

Xinhua News Agency, 1997, “UNDP Head Praises Annan’s Reform Proposals, Xinhua News Agency, 16 July 1997.

Click to access UNDG-Functioning-and-Working-Arrangements-3-1.pdf

http://www.unsceb.org/content/member-organizations

Click to access UN%20System%20Chart_ENG_FINAL_MARCH13_2017_0.pdf

Click to access qcpr_sgr_terminology_paper.pdf

Click to access UN%20System%20Chart_ENG_FINAL_MARCH13_2017_0.pdf

http://procurement-notices.undp.org/view_file.cfm?doc_id=19458

https://webcache.googleusercontent.com/search?q=cache:Ad2fYniA84wJ:https://www.un.org/press/en/1997/19971104.DEV2170.html+&cd=8&hl=en&ct=clnk&gl=sg

https://www.google.com.sg/search?q=%22UNDG%22+%22Delivering+as+One%22&oq=%22UNDG%22+%22Delivering+as+One%22&aqs=chrome..69i57.12329j0j4&sourceid=chrome&ie=UTF-8

Characteristics of the new foreign aid architecture and ways forward

Introduction

Countries have developed at various paces, some of them as a result of foreign aid or more officially known as Official Development Assistance ODA. In recent years, there have been many changes to the ODA architecture, including 1) a decreasing amount of aid channelled through multilateral organisations 2) the emergence of new donors and 3 new channels for ODA delivery. In this article, I detail these three characteristics and present possible recommendations to improve the global aid architecture.  This article specifically centres on aid for the purpose of international development and excludes other forms such as military aid.

Decreasing usage of multilateral organisations to channel aid

The first characteristic of the new aid architecture is a decreasing usage the multilateral system to deliver foreign aid.  Certain multilateral organisations such as the World Bank’s International Development Association (IDA) require constant financial funding from their shareholders every three years. Historically, the US has provided the highest share for each IDA replenishment round. In recent years, it has, however, reduced its contributions to IDA replenishments: from 13.78% in IDA 14 to 11.92% in IDA 18, the most recent replenishment round. Although the numerical volume of US aid via the IDA has increased over this time period, this decrease in share indicates an increasing disinterest in utilising this multilateral organisation. The United Nations Educational, Scientific and Cultural Organisation (UNESCO) is another organisation not well favoured by its member states. The UK, for example, rated the UNECO as an average organisation in its last two multilateral aid reviews  and reduced its contributions accordingly.[2][3] In the wider picture, the proportion of aid through multilateral organisations in 2013 was 28%, down from 32% in 2006, while total bilateral aid increased 5 percentage points across the same period.

Recommendations

Multilateral organisations do have disadvantages by not acting according to their shareholder’s wishes, are over-bureaucratic and propose extreme ideologies upon recipient nations. They should hone their expertise on areas such as global public goods and knowledge information. They should not just focus on global targets such the Sustainable Development Goals (SDGs) but work with local stakeholders to ensure aid addresses specific topics. It may not be easy to win back the trust of donor nations, but multilaterals must evolve in order to gain a steady resource for their aid flows.

Rise of new, non-traditional donors

A second big change in the international aid architecture is the rise of new or non-traditional donors. Previous aid recipients or new donor nations such as China, India and Middle Eastern countries have joined ‘traditional’ donors in providing foreign aid. Many of these new donors do not sign up to OECD aid standards or aid agreements, therefore their aid projects and results are less transparent than other donors and may more often than not, providing aid for purposes other than for development. These donors are thus heavily criticised and their aid labelled as ‘Rogue Aid’.[4]

 

This criticism of new donors is widely exaggerated. First, aid from non-traditional donors is structured to differ from neoliberal or Washington Consensus-style policies which focus exclusively on free market ideologies. Second, these donors do indeed adhere to international aid rulings. For example, China only financed the new Cambodian electronic library, and did not impose any conditions along with its aid. Third, new donors help fill financial gaps as some traditional donors have reduced their own aid disbursements.

Recommendations

Nevertheless, these new donors do need to improve the reporting and accountability of their aid projects, many which are shrouded in various forms of secrecy.  These new donors should sign up to international aid agreement like the Paris Declaration to gain the trust of other donors and recipients.[5] With less distrust between tradition and new donors, both sides can more effectively address development topics including those affect all countries, for example, humanitarian crises.

The rise of trust funds

A third characteristic of the new aid architecture is the rise of trust funds. Trust funds, or non-core aid, are projects set up by bilateral donor(s) within multilateral organisations for specific development themes or specific geographical regions.[6] Aid via trust funds has been on the rise, increasing by 8% in real terms since 2009 while the growth rate of core multilateral aid has declined between 2008 and 2011.[7] Foreign aid via trust funds first helps circumvent the bureaucratic and slow-acting nature of multilaterals and reach recipients more effectively. Second, trust funds allow aid to reach regions which donors do not have an existing legal agreement with. Third, they also allow donors to quickly respond to new emerging international development issues such as humanitarian crises.

Trust funds do have their share of disadvantages. First, the funding of trust funds results in diverting foreign aid away from resource-dependent multilateral organisations. This is another factor for the decrease in aid through multilateral organisations.  Second, trust funds, even those within reputable multilateral organisations such as the World Bank, lack stringent accountability.[8]

Recommendations

Trust funds will continue to be popular for donors that wish for faster results for their aid contributions. Donors should ideally improve their rationale for creating trust fund and increase the level of transparency over existing funds. They should ensure that aid through trusts do not displace aid provided through multilaterals, as well as prevent duplication of existing development projects.

Conclusion

As the international community shifts to meet international development targets such as the SDGs, foreign aid will continue to play its role in improving development. The international aid architecture has been characterised by donors channelling less aid through multilateral organisations, new donors emerging, and aid channelled through specific funds within multilateral organisations. This article has detailed these three characteristics and included some recommendations for reform. These characteristics are not detrimental per se; however, they do require change in order to ensure aid truly improve international development.

[1] http://ida.worldbank.org/financing/replenishments/replenishments

[2] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/224926/unesco.pdf

[3]https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/573494/United-Nations-Educational-Scientific-Cultural-Org-Review.pdf

[4] http://foreignpolicy.com/2009/10/15/rogue-aid/

[5] http://www.oecd.org/dac/effectiveness/parisdeclarationandaccraagendaforaction.htm

[6]http://www.oecd-ilibrary.org/docserver/download/4310191e.pdf?expires=1513610912&id=id&accname=guest&checksum=1D10E182AF7EFCB0A0DEB2C896DBCE09

[7] http://www.oecd.org/dac/aid-architecture/2013%20Multilateral%20Aid%20Report.pdf

[8] https://icai.independent.gov.uk/wp-content/uploads/ICAI-World-Bank-Final-Report_P1-73.pdf

Hello new FCO-DFID “development” department

Well besides the so-called Conservative-DUP “broken” deal, Theresa May further “joined up” ministers in the Foreign and Commonwealth Office (FCO) and Department for International Development (DFID) with two ministers of state “joint up” or working in both departments. They are the Rt Hon Rory Stewart OBE and the Rt Hon Alistair Burt.

This isn’t explicitly a merging of both departments but definitely drawing the work of both ministerial departments together. This is the first time since 1997 (and this year being DFID’s 20th anniversary) that DFID’s junior ministers hold a double post, especially from the department the department it once split from. Even under the very first Theresa May government, DFID junior ministers were specifically just DFID ministers. Clearly, this could be due to the ‘new’ Conservative party viewing aid more geared towards UK taxpayer’s desires and national security.

This “joint-up” through junior ministers has naturally received criticism, first of from the fist Conservative Secretary of State Andrew Mitchell and parliamentary questions on their ministerial responsibilities and their time spent between the FCO and DFID. There was also a House of Lords debate (debate here and here with members arguing for and against a joint-up FCO and DFID.

Cries of merger and back to the early 1990s (where DFID was the Overseas Development Association under the FCO) may do no good as this shadow joining up takes place. One key example is the UK boosting its ‘aid’ to Nigeria, and Boris Johnson tweeting how the new High Commission would “bring FCO and DFID staff under one roof.” Nevertheless, one of these joint ministers, Alistair Burt, stated that there is no desire by the current Conservative, or Conservative-DUP coalition (no DUP Ministers in the government) to merge DFID under the FCO. The news article, however, mentions how pompous (my view) Boris Johnson said “It was a colossal mistake in the 1990s to divide DFID from the Foreign Office” (see The Sun. Yes that’s a leading right-wing, tabloid newspaper, but that’s Boris Johnson’s view.

Time wil tell how this new joint-up Ministerial or joint DFID-FCO work will mean for international development.

Criticism of UK aid: it’s time for aid advocates to make a choice — Phil Vernon’s blog

Recent articles in British newspapers The Times and the Mail question whether the British Government is able to spend over £12 bn per year on overseas development aid. This in a context of large government cuts in other expenditure, while parliament legislated in 2015 that Britain is required to spend at least 0.7% of the […]

via Criticism of UK aid: it’s time for aid advocates to make a choice — Phil Vernon’s blog

The flaws in the Anti-Corruption Agenda and how to change it

The flaws in the Anti-Corruption Agenda and how to change it

In May 2016, the UK hosted the Anti-Corruption Summit in London, bring leaders from developed and developing nations as well as practitioners and interest groups. World leaders and academic penned various articles on their views and experiences in addressing corruption. The summit ended with a strong communique noting the evil nature of corruption on growth and society, and lots of proposed initiatives to combat corruption. It thus appears that corruption is an evil phenomenon that needs to be constantly fought and removed. This article however asserts that not all forms of corruption are detrimental to a country’s development and anti-corruption methods result in adverse effects on countries.

First, there is no strong definition of corruption. It may be said that corruption is “the abuse of public trust for private again”. However, the term “public trust” is too wide definitions as different parts of the public in a community have different degrees of trust to public officials or the government. Likewise, “private gain” has a diverse range of meanings as such gain could even be redistributed to the wider community. Following suit, the action of say an individual may in fact assist not hinder development. A bribe from a government official may or may not always end up with an inefficient producer. Likewise, a free market capitalist may not always use funding efficiently. Hence, it is not advisable to classify all forms as corruption as detrimental to growth. There may also be instances where local corruption where may in fact be conducive to growth. Ha-Joon Chang cites a case where an investor in Vietnam would be better off accepting a bribe since the common method would require extensive paperwork. This of course may not be the case in all countries. However, it indicates that each country has different social and political institutions or norms which shape the development of that area.

Second, previous and present efforts to address corruption have either not stopped it or in fact inhibited development in the country. A long standing view by donors is that the state should have little inference with economic activity. This longstanding approach especially during the 1980s to the 1990s in fact allowed private and government-owned firms to practice corrupt activities. In the post-Washington Consensus era, donors suggested the state intervene to ensure stronger property rights and rational economic transactions, or just “getting the institutions right”. This meant that the state would ensure a market-centric system would still continue on. Second, it meant that the same rigid framework was presented to developing countries. This constituted the “Good Governance Agenda”, which still did not help rectify corruption. In fact, it fostered new forms of corrupt activities such as “crony capitalism” which was prevalent in post-communist Eastern European countries and before and during the Asian Financial Crisis. The Good Governance Agenda has furthered been a signpost for aid recipients to adhere to in order receive aid, further setting conditions similar to those they faced in the 1980s. As with the Washington Consensus, this agenda actually inhibited economic growth. Yet this is the agenda used by political leaders from that time until this anti-corruption agenda.

The above indicates that corruption isn’t always anti-developmental in nature and efforts have not stopped corruption and stalled development. This article does not aim to let corruption still run rampant; rather new approaches are definitely needed. First, practitioners should not view all forms of corruption as evil or anti-developmental barriers. They must careful examine each different institutional context before implementing any counteracting measures. Second, a whole new approach is needed when address actual forms of corruption. Donors and governments should focus on the poor and equality when conducting anti-corruption measures. They should not just focus on market-centric or growth-enhancing anti-corruption measures. Third, there should be a change of operational culture within donor nations and organisations for a new anti-corruption approach. Practitioners in development organisations may still focus on the same methodology and ideas, despite a stated change in approach. Such an internal change may of course take a while to alter but it is necessary in order for a different approach towards corruption.

***
To be completed

It’s right to question aid, but better to focus on effectiveness, rather than the 0.7%

The 07% fetish comes up again.

Phil Vernon

A version of this post is on Huffington Post.

In the UK, a parliamentary debate can be initiated by popular petition. On 13th June, Parliament will debate the proposition that the government’s approach to foreign aid is flawed. This is based on a petition, initiated by the Mail on Sunday newspaper and signed by over 230,000 people, as follows:

Despite spending cuts at home the Government is committed to hand over 0.7% of national income in overseas aid, regardless of need. The Mail on Sunday believes voters do not want this and instead, we should provide money only for truly deserving causes, on a case-by-case basis. A bill passed in 2015 required the Government to spend a fixed 0.7% of gross national income on foreign aid. UK handouts will rise from current £12bn to £16bn by 2020. This is by far the highest rate of any G20 nation…

View original post 1,233 more words

Links for Thought 12

1) The Real Hamilton: What’s Not to Love?

A Bloomberg article that talks about Alexander Hamilton, one of the very early US Treasury Secretaries, and how his ideas to grow the US economy then wouldn’t be accepted by the mainstream economists and politicians today. It quotes what my Cambridge Professor, Ha-Joon Chang said about government intervention in the US then.

2) What is new about the BRICS-led New Development Bank?

An article on the Brazil, Russia, India, China, South Africa (BRICS) Development Bank. Nice to have another non-Washington Consensus-centred Multilateral Development Bank (MDB), but how “new” will the development ideas be?

3) Against Corruption: a collection of essays

Ah, the Anti-Corruption Summit held in London and chaired by the Conservative government has ended. The link i s a collection of articles by academics and world leaders on corruption, but in the neoliberal, new institutional economics version of corruption. The articles while pretty ok, fail to consider that some kinds of corruption do not inhibit ecobnomic growth and that anti-corruption methods have failed or reduced growth. The articles fail to include the works on institutional economists like Ha-Joon Chang or Mushtaq Khan.

4) The Central African Republic must be built from scratch

A Guardian Development article talking about the effects of conflict in the Central African Republic.

5) An age of choice
for developmentfinance

This Overseas Development Institute (ODI) report looks at the multitude of channels for development finance using case studies.

6) Offshore centres hit at US financial transparency ‘hypocrisy’

You also aren’t transparent, or in a known phrase, pot calling the kettle black. Ok, everyone hides their financial assets. How then to realy clamp down on “offshore” (or inshore then)?

7) New development thinking: rising powers and the role of business

An Institute of Development Studies (IDS) article on the role that Indian and Chinese businesses play in development.

8) Asian Infrastructure Investment Bank to cooperate with European Bank for Reconstruction and Development

If you are partnering with an established but slightly neoliberal regional development bank (RDB), then where is the “new” development ideas?

9) Unsustainable Development Goals?

Ngaire Woods writes about the enormous challenge of the Sustainable Development Goals (SDGs). I very much agree.

10) Closing Developing Countries’ Capital Drain

I know it’s an article from February, but Joseph Stiglitz always nails it, this time on capital drain.

New article coming soon (hopefully).