Better Aid Comes With Better Political Understanding




 

The 30.5 billion Euro European Development Fund (EDF), is one third of the total EU foreign and development budget. Organising how to spend this vast resource wisely, is a massive political and bureaucratic challenge involving: 28 EU countries, the European External Action Service, the European Commission, the European Parliament and 74 governments from Africa, Caribbean and the Pacific (ACP), and supposedly civil society and private sector actors as well.

The 11th EDF will now unfold in a post-2015 context where Official Development Assistance (ODA) is under pressure to show added value among broader sustainable development funding. It will be a critical test of EU’s external action and the ability of EU’s development policy to achieve high-impact aid. This is particularly important at a time of austerity.

At the European Centre for Development Policy Management (ECDPM), we took a closer look at how the EU has conducted the programming of 15 billion Euro at the national level. We found that two of the EU’s major policies commitments to deliver higher impact aid have been put into practice through the Fund. More money was directed to least developed countries (LDCs) and low-income countries (LICs), such as Ethiopia, Tanzania and Zambia. Along with that, aid now concentrates on a limited number of sectors per country.

Nearly 40pc of the 11th EDF has been allocated to sustainable agriculture and energy combined.  Roughly speaking, one third of the funds go to supporting governance, with a particular focus on public financial management; governance reforms are to be pursued in all sectors, including health, education, water, energy and transport.

Social sectors receive comparatively limited attention: although the headline target of spending at least 20pc on social sectors is achieved across the ACP countries, only half of the countries actually identify a social sector within their priorities. Another interesting feature of the 11th EDF is that the transport sector has fallen out of grace, and receives only 10pc of funds. This is a dramatic fall, knowing that in the previous EDF programming cycle 25pc of funds went to transport.

The 11th EDF is strongly aligned to national development strategies of the receiving countries concerned. However, there is substantial evidence that the EU’s own policy priorities were achieved through top-level EU direction and tight control from headquarters. This meant that EU programming followed a very top-down approach, and that the EU headquarters had an upper hand when deciding sector choices, not partner countries’ national stakeholders.

Despite efforts by EU delegations to consult governments and civil society, their opinions were too often overruled. This diluted the principles of country and democratic ownership. While programming is a difficult process to manage, if the EU is serious about development effectiveness, future programming exercises will need to tilt the balance back towards national stakeholders.

A top-down approach to programming also meant that in-depth knowledge of countries politics and economic drivers of change and sector specificities was not always a key driver in decision-making. That EU’s sector choices are relevant in terms of addressing country development needs, does not necessarily mean that they are the best choices in terms of delivering results.

A more fundamental issue is whether a narrow sector focus is actually the best way of approaching aid programming to generate results. Focusing on a limited number of sectors, in theory, allows for a more strategic use of resources. However, in practice, this assumption does not always materialise.

Much depends on the particularities of each sector; the quality of an intervention does not only depend on the finances.

Finally, the division of labour is far from perfect and sector choices are still largely dependent on donor priorities rather than country needs. This can lead to many perverse effects when concentrating aid on a limited number of sectors.

It would be a big shift for EU and ACP to switch to a different system that focuses more on programming for end results, rather than specific sectors. Some donors are already experimenting with thematic and multi-sectoral programming for results. This debate needs to take place within the EU, and it needs to take place in the context of the post-2015 sustainable development agenda. Supporting the transition to sustainable development in every country may require a more integrated approach to programming, beyond sector concentration.

The EU’s development policy, Agenda for Change, may also need to be revised in the near future to better reflect the post-2015 framework. There is no direct need to adjust policy priorities so as to guarantee the continuity and predictability of EU support. However, in light of the world’s current global poverty geography, there may be a need to revise EU differentiation and aid allocation criteria, by incorporating more nuanced indicators that take account of sub-national differences such as inequalities.

Collectively, EU is still the biggest aid donor and although there is consensus that ODA alone will not bring about development, it is clear that ODA can still play an important role in least developed countries (LDCs), fragile countries, and even in some middle income countries (MICs). In a post-2015 context, future EU aid programming processes may need to place even more emphasis on analysing the added value of EU aid in different contexts, how aid fits in with partner countries’ strategies for transitioning towards sustainable development and mobilising the funding and innovation that are needed.

EU aid objectives will need to be revised and be made more realistic, in line with declining human resources and EU’s loss of political leverage. Success in delivering high-quality and high-impact aid will depend on whether EU is able to devise a human resources management policy that matches its vision for external action and international cooperation.

This may require clarifying how EU international cooperation fits within its broader and more political and interest-driven external action agenda in its partner countries and within EU’s new Global Strategy to be launched in June 2016.  If EU adopts a more politically informed approach, it will need the presence of multiple stakeholders in Europe and developing countries to robustly hold it to account. This is a precondition to ensure that a more realistic yet politically visionary agenda to development is pursued, but not one that is driven by the short-term political, economic, and security self-interests of the Union.



By Alisa Herreo Cangas
A policy officer for European Centre for Development Policy Management (ECDPM)

Published on Oct 19,2015 [ Vol 16 ,No 807]


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