No impact

The question drew a somewhat testy response from the Bundeswehr lieutenant advising the Kofi Annan Peacekeeping Training Centre in Accra, the capital of Ghana. Yes, when the centre opened civilian development agencies repeatedly approached him, insisting that their cooperation was essential. “They simply would not accept that there was no need for their services.” The anecdote highlights a fundamental problem of international aid agencies: instead of making themselves superfluous by doing good work, development agencies keep finding new tasks that underpin their raison d’être. In this sense, they do not differ from other formal organisations.

There is, of course, quite a bit for development agencies to do in poor countries, but there are simply too many of them. That is what Jörg Faust and Dirk Messner conclude in a recent discussion paper published by the German Development Institute (GDI). The consequences are well-known: overstretched administrations in recipient countries, intransparent use of funds, duplication of work and aid agencies getting in one another’s way.

A couple of years ago, donors and recipients responded to this deplorable state of affairs by endorsing what came to be known as the Paris Declaration. It states that donor countries and multilateral aid organisations should coordinate their work more effectively and gear it more closely to institutions and processes of recipient countries. At first glance, such alignment seemed to point in the right direction. But nearly three years later, Messner and Faust find the Paris Agenda for reforms flawed. They argue it only addresses the symptoms, rather than the root problem, which is the oversupply of aid agencies: “Instead of convening several dozen bilateral, multilateral and private donor agencies for endless coordination rounds, what would be needed first to boost alignment and accountability is a significant reduction in the number of donor agencies.”

Indeed, Messner and Faust reckon the Paris Declaration has actually increased the cost of administering development cooperation. Their report on implementation of the Paris Agenda makes pretty grim reading: far from increasing aid efficiency, it has led to a new “planning euphoria” among agencies and spawned unwieldy sector programmes, in which donors seek a common denominator among their diverse interests. For the actual “principals” of development aid, as Faust and Messner call the taxpayers of donor countries and the target groups in recipient countries, it has become even harder to judge whether the funds made available are used reasonably or not.

To increase the effectiveness of development aid and to counter the criticism that the “aid industry” puts its own interests before those of the poor in target countries, Faust and Messner call for a fundamental change of policy. Donors should establish who is responsible for coordinating aid in a particular sector of a partner country. Project and programme implementation, on the other hand, should be managed by recipients, who could study what is on offer in the “agency market”, and then pick their choice. In countries where political and social institutions are too weak (or unwilling) to adopt such a transparent, competition-oriented approach, development cooperation should focus on strengthening governance in the first place.

What is needed for more competition is greater transparency, common standards and “truly independent evaluation”, Faust and Messner state. “As long as a large number of development-cooperation agencies continue to prefer evaluation practices that elude comparison and are often anything but really independent, it will be more than difficult to let operations thrive on more competition.”

The chances of any reform of international development cooperation hinge on the number of donor organisations, Faust and Messner argue. In their view, the market would determine the number of operational agencies in a more competitive setting. Obviously, they are not speaking of the policy-level, at which cooperation is planned and managed. But unless there is a “breakthrough” on reducing the number of implementing agencies, “the Paris Agenda will fail to achieve its ambitious goals”, they maintain. (Also note essay on development-agency competition on page 56.) (ell)