Room for improvement in Australia’s overseas development aid

Poor countries typically receive aid from many donors. In Vietnam, Australia is one of 51 multilateral and bilateral donors (Vietnam Ministry of Planning 2010). Interactions between a large number of donors and a single recipient government can have a cumulative and damaging impact. For example, in 2005, the Tanzanian government produced about 2,400 reports for the more than 50 donors operating in the country (TASOET 2005: 1). In the Pacific Islands, some senior government officials are so busy meeting donor–financed consultants and producing reports for donors that they have little time for the business of governing (AusAID 2008a: 21).

• quoted in the Australian Government Independent Review of Aid Effectiveness chapter 1-3

Perhaps we need a common OECD project committee or other multilateral aid review committees so only one reported needed rather than multiple reports - focus on fewer big ambitious projects rather than many small impact projects?

The EA community for historical reason doesn't do much analysis of government aid (actually, no one does), even though this is a fundamentally public activity in democratic countries. And that's reasonable, it's extremely complex to analyse incumbent donors. It's easier to think on the margins, and from the perspectives of individuals. To get started, I read through the Australian Governments Independent Review of Aid Effectiveness to identify the counter-intuitive takeaways.

what's the current scope of Australia's aid operations

'Australians are generous supporters of this cause. Each year the Australian people contribute $800 million to NGOs for aid work. Australia has some of the most active NGOs in the field and many Australians also volunteer their time and skills overseas. Additionally, on behalf of the people, the government provides $4 billion a year, and runs a substantial aid operation around the world.'

Why is this a timely issue

'The total volume of aid has grown dramatically, driven by: large increases in aid from traditional donors (basically the Western industrialised countries); the emergence of new non–government donors (such as the Bill and Melinda Gates Foundation) and global funds (for example the Global Fund to Fight AIDS, Tuberculosis and Malaria); and the rapid growth in aid from non–traditional donors such as China and Brazil'

Not to mention the emergence of history's pre-eminent aid effectiveness focussed civic community - effective altruists

Effective Development Group:

“While we believe the aid program should aim at contributing to development and poverty reduction efforts overseas, we need to recognise its limited capacity to yield results, and even sometimes its potential counterproductive effect over the longer term, given the sheer complexity of the dynamics at play and the many factors/actors that contribute to them.”

-quoted in the Australian Government Independent Review of Aid -Effectiveness Chapter 1-3

----Policy proposals----

Multilateral aid consolidation

The Australian Government's Independent Review of Aid Effectiveness identified that the principle operating procedure for Australian foreign aid should be value for money. Those multilateral organisations that they have recently found and in the future those which they find to have a poor or worse overall assessment of value for money should be stripped of their funding, which is probably in the hundreds of millions and possibly into the billions

References: see part 3 of Independent Review of Aid Effectiveness

Independence from aid

To ensure Australia's aid partners don't become dependent on Australian foreign aid, thus destabilising foreign economies stability and self-reliance - e.g. undercutting farmers produce at the markets thus depriving them of incentives to produce, thus becoming more dependent and creating less surplus and thus greater deprivation and poverty over the long term and greater costs to our aid budget

Scaling down aid or halting expansion of aid in geographic areas identified by the review where there is both a low case for expansion but high reliance on bilateral delivery channels

References: see part 3 of Independent Review of Aid Effectiveness

Defragmentation

(see print screen of page 39 in chapters 1-3 of the report)

To put it simply, there are too many small ineffective programs and these are costing wellbeing and Australian dollars.

'Evidence of the problems of fragmentation, and recommendations to help reduce it, are a recurring theme through this Report. It needs a sustained effort to consolidate and tighten political and bureaucratic discipline in the future.'

-chapters 1-3

Public communication

Aid budget given to communicating effectiveness or otherwise:

'The government does not have an effective communications strategy for the aid program. This contrasts for example with the proactive communications practices of the Australian Defence Force. The contrast was particularly stark following the Padang earthquake in Indonesia when the ADF actively promoted publicly the work it had done, whereas there was very limited coverage of the Au said effort. A generally ad hoc and reactive approach may have been viable for a small program, but it will not work given the increased scrutiny the program will face as it grows. Asiad’s leadership has been more forthcoming and more publicly available than in the past, and this is a welcome development.'

'The Review Panel does not advocate a public relations strategy which is merely self–congratulatory. The issue is, rather, ensuring that the Australian public are able to obtain an accurate and full account of the resources which are being devoted to aid, both the accomplishments and the difficulties. Fostering more informed public debate about the program is healthy and appropriate. The Australian people have a right to know why Australia gives aid and what is being achieved with their money. But the requirement goes beyond public information. It is also desirable that there should be a greater sense of public engagement with the aid program. The Review Panel makes a number of recommendations in this regard.'

Seconded recommendations that are obvious

'Recommendation 37: A Transparency Charter should be developed, committing the aid program to publishing documents and data in a way that is comprehensive, accessible and timely.'

National interest scepticism

One problem with the objective of the program as it is presently stated is that it is unclear and ambiguous in relation to how the national interest should figure in the program. The Review Panel believes that this issue should be brought out into the open and addressed squarely. Those responsible for managing the transition to the much increased aid program of the future need clarity and guidance.

In the first place, Australia’s interests are served by a world of prosperity and opportunity, rather than one plagued by poverty.