A Classification Framework for Aid Delivery Methods

[jdendura]

Aid delivery methods have had many “names” over the past 50 years ranging from projects, to programmes, to integrated development projects, to sector approaches, to sector budget support or direct budget support. In this plethora of “titles”, donors are not agreeing amongst themselves. 

In addition, countries and practitioners are sometimes confused, if not lost.  They have to redefine the meaning of the words used for every assignment.  In this situation, how can one begin to discuss content rather than form? Different aid delivery methods require different management, i.e. aid management, increasing the transaction costs.

Such confusion does not support a basis for donor coordination and harmonisation and certainly does not allow easy and practical aggregation of data. A simple classification framework may thus be useful for aid delivery methods.  This paper proposes such a classification.

[Napodano]

jdendura,

neat and comprehensive classification. My interest is on the mechanisms of aid delivery and specifically I like to mention two issues:

• predictability on aid disbursments: donors asks Partner Governments to prepare Medium Term Expenditure Frameworks, MTEF. When will they accept themselves to prepare MTAF where A stands for Aid?
• make budget support work: I believe the right way is to move from aid deconcentration to full decentralisation whereby local representative offices decide how and when to disburse funding, after HQs has defined the total envelop for the country.

[jdendura]

Thanks Mauro. I think this is indeed a critical issue: predictability. I think that this can be enhanced with more clarity on the aid delivery method, as in fine, there is not so much difference in economic terms; the key difference being their management. This aid management can have a great impact, reducing predictability and lowering incentives for change.

[harnett]

Just for clarification:

Under PEFA the donors are scored according to the regularity of delivery of Budget Support - a nod towards predictability, which of course is a tenet of Paris/Accra.  However, I suspect that donors are moving away from Paris / Accra at present and, as noted in other posts, will return more to project aid and greater conditionality - sad but true, and no doubt a reflection of both the current economic climate but also the ineffectiveness of GBS in countries with weak/corrupt institutions.

As for the point about decentralisation, again a noble thought, but the confusion here, is that often the ultimate arbiter of Aid is the Ministry of Foreign Affairs (HQ) - a political beast that will want control aid spending according to political priorities.  Last year, the Swedish Zambia office was keen to continue disbursements of aid despite the uncovering of significant corruption in the ministry of health involving their (and Dutch) funds.  They were overruled by HQ - the ultimate arbiter of policy, and, I might add, the custodian of their taxpayers monies.  I can't see this decentralisation happening for large amounts of aid.

[jdendura]

Thanks for your post. I think there is a lot of debate of GBS, SBS and the lot, but surely not enough about their real impact and the types of management they require to be an effective aid delivery method, which incentives are supporting change in a direction that is both desired by beneficiaries (e.g. vulnerable groups or others - if such a direction can be known...) and by the international financing institutions who have to report about the use of the funds. My attempt with the classification was indeed to show that we can use simple tools to refocus on the important issues.

As for decentralisation,  the funds flowing in decentralised cooperation e.g. NGO to sub national government have to be reported under that SNG's budget.  But clearly if the "donor" decentralised cooperation agent (an NGO) is itself dependent of a country's MoFA, it is a political issue.