By: Michael Rahija Roberta Antonaci Lucia Latino MESCI 20 November 2008 AID EFFECTIVENESS IN FRAGILE STATES
Defining Aid Effectiveness • In order to achieve the MDGs, it is agreed that we need to secure “MORE AND BETTER AID.” Aid Effectiveness refers to the second part of the equation. • Aid Effectiveness – represents “what aid can buy” in the recipient economy at a given level of aid and given existing physical and institutional constraints.
Paris Declaration (2005) • Paris Declaration is an international agreement to resolve the ways aid is delivered and managed in the context of the five year review of the Millennium Declaration and the Millennium Development Goals. • Why is it important ? • The Paris Declaration goes beyond previous agreements. • Twelve indicators to monitor progress in achieving results • The Paris Declaration creates stronger mechanisms for accountability.
The 5 Principles : • Ownership • Alignment • Harmonization • Managing for Results • Mutual Accountability
Fragile States • Definition – Donors define fragile states as those that lack the capacity and/or will to perform a set of functions necessary to the security and wellbeing of their citizens. • Fragile states are treated as those countries in the bottom two quintiles of the World Bank's Country Policy and Institutional Assessment (CPIA). • Economic Management • Structural Policies • Policies for Social Inclusion/Equity • Public Sector Management and Institution
Why has aid not reduced poverty in fragile states? • Aid delivered at the wrong time • No aid until there is crisis • Tends to decrease in post-conflict states. • Volatility and uncertainty • Aid delivered in ineffective ways • Short-term uncoordinated projects • Not enough aid • Collier-Dollar Selectivity Model
Half of net ODA excluding debt relief benefited just five out of thirty-eight fragile states in 2006
Working in Fragile States • 10 Principles incorporated into the Paris Declaration: • Take context as a starting point; • Do no harm; • Focus on state-building as the central objective • Prioritise prevention; • Recognize the links between political, security and development objectives; • Promote non-discrimination a basis for inclusive and stable societies; • Align with local priorities in different ways in different contexts • Agree on practical coordination mechanisms between international actors; • Act fast...but stay engaged long enough to give success a chance; • Avoid pockets for exclusion (aid orphans)
Improving Aid Effectiveness and the MDGs • Donors must be much more goal and results oriented in the ODA programs. • PRS • Donors must further improve the allocation of ODA to better achieve the MDGs. • Donors should better align the ways they deliver aid with the realities on the ground in different types of recipient countries. • Selectivity (NGOs vs. Government)
Why do we need to help fragile states • They destabilize neighboring countries • They are more likely to become unstable and fall prey to criminal and terrorist networks. • Costs of the late response to crisis are high. • 41% of all child death occurs in a fragile state • 1/3 of the world's poor people live in fragile states. • MDGs CANNOT BE REACHED WITHOUT PROGRESS IN THESE STATES!!!!!!!
Reference List Center of Global Development (April 2004) Radelet, Steven. Aid Effectiveness and the Millennium Development Goals. DAC’s Fragile States Group (December 2007) Ensuring Fragile States are not left behind DFID (January 2005) Whywe need to work more effectively in fragile states? High Level Forum on Aid Effectiveness (March 2005) Paris Declaration on Aid Effectiveness Oxford Policy Management (January 2008) The Applicability of the Paris Declaration in Fragile and Conflict-affected Situations Oxford University (January 2004) Lisa Chauvet and Paul Collier Development Effectiveness in Fragile States: Spillovers and Turnarounds UNU-WIDER (January 2006) McGillivray, Mark. Aid Allocation and Fragile States. Senior Level Forum on Development Effectiveness in Fragile States (January 2005) Principles for Good International Engagement in Fragile States UNU-WIDER (January 2008) Mark McGillivray and Simon Feeny Aid and Growth in Fragile States UNU-WIDER (May 2006) François Bourguignon and Mark Sundberg Absorptive Capacity and Achieving the MDGs
Websites • www.oecd.org • www.dfid.gov.uk • www.accrahlf.net • www.opml.co.uk • www.cgdev.org • www.wider.unu.edu • www.worldbank.org