A worms eye view of aid architecture'

1
A worms eye view of aid architecture.

• Gaps and Challenges for Reform beyond the Paris
  Agenda
• Andrew Rogerson, Overseas Development Institute

2
Framework

• Subsidiarity principle
• Paris agenda and its results
• A word on aid agency incentives
• Competition or Collective Action
• 5 supra-national policy steps

3
Subsidiarity principle

• Assume perfect harmony locally
• Derive minimum changes globally
• Example fragmentation
• Example predictability
• Example global public goods

4
Paris Agenda and implicit results framework

• The Aid Effectiveness Pyramid
• Seven Habits
• Different country perspectives
• Transaction costs and their limitations

5
Building partnerships that make aid more effective
Ownership
Partners set the agenda
Reliance on partners systems
Alignmenton partners priorities
Alignment
Sharing information
Simplification of procedures
Commonarrangements
Harmonisation
6
An alternative results framework

• Aid tail and domestic finance dog
• (More downward accountability)
• Input institutional change
• Output better resource management
• Outcome link Institutions-gt poverty
• But Transplants? Causality? Proof?

7
Aid Agency Incentives

• Preferences Diverge (trust, information)
• Agencies Mediate
• Conditions and commitment Devices
• Transaction costs versus uncertainty
• Perfect trust and staff incentives

8
Competition vs Collaboration

• Increasing , but low fragmentation
• Cartel view and risks vs costs
• Unilateral action by recipients
• Unilateral action by donors
• Exhortation or financial pressures?

9
Five complementary actions

• Balancing cross-country aid allocation
• Matching predictability and results
• Raising resources for ambitious PRS
• Mutual accountability and sanctions
• Code of conduct for vertical funds

10
Balancing Allocations

• Problem bilateral aid objectives diverge
• And multilaterals performance based
• Therefore donor darlings and orphans
• Rebalancing via multilaterals, IFF

11
Alternative aid instruments

• Recipient longer horizon, risk spread
• Donor tangible results
• MDG outcome-based programs
• Large-scale recurrent cost support
• Verifiable outputs and outcomes

12
Mutual Accountability

• Correcting basic asymmetry
• Assessing donor performance (eg DRI)
• Value at country level (Mozambique)
• But also need incentives/sanctions
• Market-based, eg IFF, discipline
• Unbundling aid funding and delivery

13
its the money, stupid

• PRS closed on needs or availability?
• Too slow, not transparent adjustment
• Sachs fast-tracking several countries
• But individual donor funds do not clear
• Need liquid reserve fund across donors