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1 | 2010
Dossier | Africa: 50 years of independence — Review | Major development policy trends
Dossier | Afrique : 50 ans d’indépendance — Revue | Évolutions des politiques de développement

Trends and issues in international development cooperation

Gérard Perroulaz, Claudie Fioroni and Gilles Carbonnier
Translated by Noal Mellott
p. 143-160
This article is a translation of:
Evolutions et enjeux de la coopération internationale au développement

Abstract

Aid volume from OECD countries has set a new record. However, the assistance recorded as ODA includes categories that do not contribute to reducing poverty in developing countries. Emerging economies and private donors provide an increasing proportion of aid. Progress has been made in implementing the 2005 Paris Declaration on Aid Effectiveness in a few fields, such as untying aid, but the results do not meet expectations. The approach, too often purely technical, omits taking fully into consideration the political dimension which strongly affects aid effectiveness. The issue of overall policy coherence receives renewed attention at a time when the debate about climate change is leading development agencies to reconsider goals and strategies.

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1.Introduction

1In 2008 official development assistance (ODA) from members of the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) reached a record USD 121.5 billion. This significant increase is a promising sign. After a period of regular growth (from USD 52 billion in 1996 to USD 107.1 billion in 2005) the amount of aid had subsided slightly till 2007 (USD 103.5 billion).

  • 1  DAC data from the statistical appendix of OECD 2009d.

2The record set in 2008 should not deafen us to the ongoing controversies about the nature and impact of aid. Since 2005 donors and beneficiaries have recognised that the Millennium Development Goals cannot be reached by merely increasing aid. Four years after the Paris Declaration on Aid Effectiveness (2005) it is time to assess the progress made towards aid effectiveness and to question the coherence of donors’ sectorial policies with their development goals. Herein we use the statistics available from OECD in mid-December 2009 to put debate about ODA into perspective.1 We then discuss the outcome of the Accra meeting and prospects for improving aid effectiveness, before reviewing the progress made on policy coherence.

2. ODA: volume and distribution

2.1. Donations under threat from the recession

3The amount of ODA in 2008, USD 121.5 billion, set a historic record. Contributions from all DAC countries, except for Austria and Norway, increased. Figure 1 presents the amount of aid by country in 2008.

Figure 1: ODA volume by country, 2008 (in USD millions)

Figure 1: ODA volume by country, 2008 (in USD millions)

Source: OECD (2009d, statistical appendix, table 1, figure 1).

4However, this record covers middling figures when we examine the share of gross national income (GNI) devoted to ODA. Although the average percentage contributed by DAC members increased considerably in 2008 (0.31%) in comparison with 2007 (0.28%), it was still less than in 2005 (0.33%). Eleven DAC countries devoted more GNI to aid, whereas nine others slackened their efforts. As figure 2 shows, this amount has not varied significantly over the past 30 years, even though the United Nations (UN) has often, since the 1970s, reiterated the goal of contributing 0.7% of GNI to aid.

Figure 2: ODA as a percentage of gross national income in certain DAC countries, 1980-2008

Figure 2: ODA as a percentage of gross national income in certain DAC countries, 1980-2008

Source: OECD: http://stats.oecd.org/​Index.aspx?DatasetCode=ODA_DONOR.

5European Union (EU) countries, which provide 60% of all ODA, have pledged to increase their aid to 0.56% in 2010 and up to 0.7% of GNI by 2015. However, the 12 that have joined the EU since 2004 have set lower ODA/GNI goals, i.e. 0.17% for 2010 and 0.33% for 2015. European aid still falls far short of the pledged amounts.

6Nonetheless, Luxembourg, Norway, Sweden, Denmark and the Netherlands have already overshot the 0.7% objective and even promised to increase their donations (OECD 2009b; Concord 2009). Belgium, Spain and the United Kingdom (UK) have made bigger commitments than the ODA/GNI goals set at the EU level. In decreasing order, the goals set by these countries are: Luxembourg, Norway and Sweden (1% by 2010), Denmark and the Netherlands (0.8% by 2010), Belgium (0.7% by 2010), Spain (0.7% by 2012) and the UK (0.7% by 2013).

7In 2007 France came back on its pledge of 0.7% by 2010 and adopted the EU targets. In contrast, Switzerland has never pledged to devote 0.7% of its GNI to aid; in 2008 its aid amounted to 0.42% of GNI, as seen in figure 2 (see also the box at the end of the article).

8The current financial and economic crisis stokes doubts about whether DAC countries will keep their commitments, since pressures will be mounting to restrain budgets. Having learned from previous crises, the DAC has warned donor countries against yielding to the temptation to renege on their pledges. During the recession in the 1990s DAC countries scaled ODA down from 0.33% of GNI in 1992 to 0.22% in 1997. We observe no significant reduction in aid at the global level in 2008, but the brunt of the recession might not be felt till the statistics for 2009 or 2010. Several countries, including Greece, Ireland and Italy, have already announced a sharp decrease in donations. Furthermore, EU countries are very unlikely to reach the objective set for 2015, according to Concord (2008), a confederation of European non-governmental organisations for relief and development. Owing to the recession, they might maintain or even increase the ODA/GNI ratio without actually increasing the amount of aid. If DAC countries were to lessen the percentage of GNI going to ODA, aid would fall off considerably, despite the fact that recipient countries need even more outside support during a crisis.

9Two recent studies conducted in Switzerland (Carbonnier and Zarin-Nejadan 2009) and Germany (Nowak-Lehmann et al. 2009) lead us to raise questions about the effects of reducing aid during a recession. These two studies, which assess the long-term impact of ODA on the donor country’s exports, reach the same conclusion. The exports of both Switzerland and Germany are rising faster in the countries to which they have supplied aid, even untied aid. Moreover, there is a crowding-out effect in that the aid from other donors negatively affects Swiss and German exports. The first study also calculated the short-term economic return of aid. There is a multiplier effect, i.e. the Swiss economy receives from CHF 1.4 to 1.64 for every franc spent on aid.

2.2. The quality of aid

10In 2008 the 48 lower-middle-income countries received 40.5% of the ODA recorded from DAC countries as compared with 39% for the 50 Least Developed Countries (LDCs) and 10.7% for the other low-income countries.2This distribution fits into the pattern set during previous years, i.e. a noteworthy trend since 2005 in favour of more aid for the LDCs.

  • 3  OECD 2009d, statistical appendix, table 25.

11Geographically, Africa and Asia each receive a third of aid as compared with 7% for the Americas, 3% for Europe and 2% for Oceania, the remainder not indicated.3 However, the primary beneficiaries are Iraq (12% of total ODA) and Afghanistan (4%) owing to, in particular, the bilateral aid provided by the United States (US), which accounts for 44% of aid to Iraq and 49% to Afghanistan.

  • 4  OECD 2009d, statistical appendix, table 14.

12The quality of aid also depends on what counts as ODA. According to a report by Action Aid (2003, 52), 60% of aid flows are “phantom”, i.e. not directly spent on poverty reduction. Aid Watch, a working group in Concord, periodically analyses the quantity and quality of the aid delivered by EU member States. According to Concord (2009), the funds devoted to debt relief, asylum-seekers and tuition fees for students from developing countries are a form of “aid inflation”. These expenditures do not represent a real transfer of funds but enable donors to inflate their ODA figures. The aid devoted to debt relief and asylum-seekers accounted for 9.3% of ODA from DAC countries in 2008. As seen in figure 3, it is especially high for Austria (45.4% of all its aid), Germany (19.1%), Italy (18.4%), Switzerland (17.7%) and France (11.7%).4 Coordination Sud, a coalition of non-governmental organisations in France, calculated in 2007 how much French aid was inflated by including the expenditures devoted to France’s overseas territories along with tuition fees, debt relief and assistance for asylum-seekers. By its estimate, 40% of French aid does not correspond to a real transfer of funds (Coordination Sud 2009).

  • 5  OECD 2009d, statistical appendix, table 14.

13Since 2004 DAC countries have been allowed to count as aid their spending on refugees and asylum-seekers during the first 12 months. According to the data for 2008, the average aid spent on asylum-seekers amounts to 2.1% of net ODA in DAC countries. This figure is even higher for Switzerland, i.e. 12.8%.5

14The objection is not to debt relief as such but to the way it is calculated. Cancelled debt is recorded at its nominal value instead of its market value, which is necessarily lower since part of the principal might not be reimbursed. Much of the increase in aid in 2005 and 2006 came from writing off part of the Iraqi and Nigerian debts. The year 2007 broke with the unusually high level of debt relief granted during preceding years. Debt relief fell by half compared with 2006; but it still represented 9.3% of total ODA in 2007 and 7.3% in 2008.

15The calculation of tuition fees for students from developing countries varies from country to country. For instance, Switzerland counts only the scholarships granted to these students, whereas France counts all schooling costs per student.

Figure 3: Debt relief and aid to asylum-seekers as a percentage of ODA volume, 2008

Figure 3: Debt relief and aid to asylum-seekers as a percentage of ODA volume, 2008

Source: OECD (2009d, statistical appendix, table 14)

2.3. The “new donors”

  • 6  The DAC records aid from some countries that do not figure among its members: countries that have (...)

16The term “new donors” is misleading, referring (as it usually does) to donors who are not actually new but who now attract attention. Among donors whose contributions are taken into account but partly, if at all, in the DAC’s calculation of ODA are: some emerging economies, private foundations, sectorial funds, non-governmental organisations and private-sector companies.6 Despite the difficulties of estimating, analysing and comparing the aid from these sources, several recent studies have shed light on its size and impact. Two players hold a special place in discussions owing to the amount of their aid and to their aid policies and practices: China and the private sector.

17China is not, strictly speaking, a “new donor”, since its development strategy dates back to the 1960s. However, it does not deem itself a “donor”; it prefers talking about “South-South cooperation”. Nor does China apply OECD’s definition of ODA. It is, therefore, quite difficult to distinguish funds granted under concessional conditions from investment and loans (for exports) granted under market conditions. Chinese aid is even harder to calculate because several ministries manage it. Brautigam has estimated that China’s aid amounts to about USD 1 billion, with 45% going to China itself; according to Lancaster, the amount ranges between USD 1.5 billion and USD 2 billion (Grimm et al. 2009, 16). Since the first Forum on China-Africa Cooperation (FOCAC) in 2000 the Chinese presence in Africa has constantly increased. During the last FOCAC meeting in Sharm El Sheikh, Egypt, in November 2009 the Chinese Prime Minister, Wen Jiabao, reaffirmed his country’s commitment to aid.

18Some pundits fear that Chinese cooperation might have harmful effects on Africa (Niquet 2006). According to Dowden (2009), most Chinese aid corresponds to credit lines opened for Chinese investors in Africa. This continent accounted for 10% of China’s foreign direct investment (FDI) in 2009 and this figure will rise. The goal is not only to secure China’s supply of natural resources (Antil 2007) but also to rally to its side on the question of Taiwan/Chinese Taipei several countries that sit in the UN General Assembly (Dowden 2009). The Chinese principle of “non-interference” in domestic affairs pleases African leaders as it does not entail subjecting aid to a set of political conditions. Moreover, China’s attraction for the continent reinforces the weight that Africa carries during negotiations with the West.

19In response, some DAC countries have sought to enter into a dialogue with China about cooperation and development. Such is the case of the UK’s Department for International Development (DFID). While China seems willing to learn from the Old World’s experiences in Africa, Western countries are trying to persuade the Chinese that stability on the continent requires advances in human rights and democracy there (Dowden 2009).

20Although the private sector’s place in aid is growing, little is known about donations from such sources. We can blame this lack of information on the assortment of private organisations (associations, foundations, private firms), the variety of funding methods (subsidies, fund-raising drives, profits) and the diversity of interventions. According to OECD statistics, there has been a net increase in grants from private benevolent organisations. The financing from non-governmental organisations increased from USD 14.6 billion in 2006 to USD 18.5 in 2007. To this figure should be added USD 2.5 billion in public subsidies managed by these organisations.

21In 2005 foundations donated an estimated USD 4.6 billion: USD 4 billion from American foundations and USD 600 million from European foundations (Grimm et al. 2009). When taking a closer look, however, we notice that the Bill and Melinda Gates Foundation (BMGF) is undoubtedly the leader. Its grants amounted to USD 1.56 billion in 2006 and have risen steadily since then, up to USD 3.8 billion in 2009. The BMGF allocates funds to three programmes: global health (50%), global development (15%) and the US (35%). The global development programme was set up in 2006 as a complement to the health programme. The BMGF’s contribution to global health amounts to nearly USD 2 billion annually as compared with the approximate USD 14 billion per year for health from all other sources of ODA.

  • 7  The BMGF sits on the committees of most public/private partnerships in the health field, such as t (...)

22The emergence of such an important organisation has had an impact on the health sector. Owing to its focus on technical and scientific solutions, the BMGF turns a blind eye to other aspects of health, such as socio-economic factors and the reinforcement of health care systems (Sridhar and Batniji 2008). This orientation might cause problems as the BMGF exercises influence because of its participation in major international health organisations, where its role in drawing up agendas is not to be overlooked.7

23The emergence of “new donors” has complicated the system of international assistance. As Maurer (2009) has pointed out, making the system’s “financial architecture” more coherent is still a major issue in aid effectiveness. In recent years the international community has tried to make aid more effective. In the light of the 2008 Accra Agenda for Action, let us take stock of the advances made and limits encountered four years after the adoption of the Paris Declaration on Aid Effectiveness.

3. Reviewing aid effectiveness

24The 2005 Paris Declaration on Aid Effectiveness, which came out of international negotiations during the 1990s, enshrined three long-discussed principles (ownership, alignment and harmonisation) and two other principles (results and mutual accountability) that form the keystone for maximising aid effectiveness. It also proposed 12 progress indicators. More than three years after its adoption it underwent its first assessment by the Accra High-Level Forum in 2008. Although it represents an undeniable advance, doubts exist about achieving the objectives set for 2010. The review of aid effectiveness was tempered and the Paris Declaration has been criticised for its weaknesses, as we shall see.

3.1. The Accra meeting: renewed commitments

25The third High-Level Forum on Aid Effectiveness in Accra in September 2008 confirmed the Paris Declaration, which is now taken to be a milestone in the attempt to improve aid effectiveness. Development agencies use and discuss it. Evidence of this enthusiasm is that more and more countries are taking part in the survey foreseen in the Paris Declaration, increasing from 34 in 2006 to 54 in 2008. Half of ODA is now assessed using the Paris Declaration’s progress indicators.

26The Accra meeting reinforced the Paris Declaration in several respects (Maurer 2009). First of all, it augmented the legitimacy of international discussions about aid effectiveness by allowing voices to be heard from “civil society”. Non-governmental organisations, which had been absent in Paris, took an active part in the Accra meeting. The Accra Agenda for Action recognises their role. It also confirmed the role of the DAC’s Working Party on Aid Effectiveness in seeing to it that the Paris Declaration is implemented. Nonetheless, several non-governmental organisations think that the process begun in Accra tends to overlook them because it is still too much turned towards intergovernmental relations. The private sector, too, has remained on the sidelines of this process.

3.2. A tempered review of progress

27Two reports released by the Working Party on Aid Effectiveness measure progress towards the objectives set for 2010 under the Paris Declaration. According to them, the pace of change is too slow and the efforts made are very unevenly spread among sectors and parties.

28The report drawn from the 2008 survey assesses the progress made by 33 countries in relation to each of the 12 indicators (OECD 2008e). Satisfying results were recorded for only three of the 12, namely: the alignment and coordination of technical cooperation, the reliability of public financial management systems and the untying of aid. This last indicator, long considered to a litmus test for donor commitment to improving aid effectiveness, still holds a major place in discussions. The aid provided by DAC countries is increasingly untied. On the average, only 12.7% of ODA is tied, fully or partly, to the purchase of goods or services from the donor country. Nonetheless, as figure 4 shows, the aid from certain countries, such as Portugal, Greece, Spain, Italy and the US, is still tightly tied to purchases from the North. Some donors have undertaken significant efforts to untie their aid. For instance, the EU has pledged to untie all its aid to the LDCs. During their high-level meeting in May 2009 DAC countries promised to untie all aid for lower-middle-income countries so that the latter control decisions about procurement. Switzerland, too, has made noteworthy progress in untying its aid. In 2008 only 2.7% of its bilateral aid was tied and none of the aid to the two above-mentioned groups of countries was tied (OECD 2009d). However, the data released by OECD are far from complete; the actual proportion of tied aid is underestimated as the DAC allows for excluding “technical cooperation” and “administrative costs” from statistics on tied aid, i.e. the very sorts of aid that are often tied to the purchase of goods or services from firms in the North (fees for experts and consultants).

Figure 4: Percentage of tied aid in total bilateral ODA, 2008

Figure 4: Percentage of tied aid in total bilateral ODA, 2008

Source: OECD (2009d, statistical appendix, table 23).

Notes: The percentage shows aid fully or partly tied to purchases in the North. These statistics do not take into account the aid related to technical cooperation and administrative assistance, which DAC recommendations exclude.

29The progress recorded for the nine other indicators does not suffice to reach the targets set (OECD 2008e). More effort might make up for the slack with regard to three indicators: the avoidance of parallel project implementation units, the recording of aid flows in country budgets and the predictability of aid. The results for the six other indicators are poor: the operationalisation of national strategies, the use of national financial management and procurement systems, the coordination of mechanisms of aid delivery, the coordination among donors of their missions and country studies, the monitoring of results and the mechanisms for mutual responsibility.

30The major obstacle impeding progress towards the principles of alignment and harmonisation is the consolidation of national financial systems for managing aid (OECD 2009a). Given their strong aversion to risk-taking, donors are reluctant to use national systems with limited accountability, transparency or performance. As a consequence, they prefer using parallel units to implement projects, but this works against achieving the objective of reducing the number of channels conveying aid. Another consequence of this mistrust of national systems is to reinforce conditionality. While the World Bank and the International Monetary Fund (IMF) have done much to reform their approach in favour of ex ante conditions, donor countries still set strict requirements as preconditions for grants. Donors must more strongly support building up their partners’ capacities. This is even more important when national systems are operational but underused by donors, owing to their mistrust. Furthermore, aid should be more transparent and predictable so as to facilitate planning and the implementation of development strategies (OECD 2008e).

31The fragmentation of aid also affects its effectiveness, owing to the presence of too many donors in a single country. In all, OECD has counted 225 bilateral organisations and 242 multilateral organisations active in cooperation and development. Donors spread their aid thinly among too many countries. In 2005-06 38 countries received aid from at least 25 bilateral or multilateral sources. In 24 recipient countries 15 or more donors provide less than 10% of the aid (OCDE 2008f). Despite the sensitive questions (comparative advantages, specialisation and delegated cooperation) that arise when lessening fragmentation, some donors have tried to reduce the number of missions, studies and diagnoses made in the same field. For example, the EU has adopted a code of conduct on the division of labour in development policy (EC 2007a).

32The Accra Agenda for Action has insisted on the principle of ownership. In this respect, national strategies have progressed since 2005 and partner countries are focusing on new themes, such as human rights, gender equality and good governance. However, these strategies are seldom operational because they are not sufficiently results-oriented. Furthermore, parties in society and the private sector are not well enough integrated in drafting national strategies.

33It is especially difficult to apply the principles of mutual responsibility and a results-oriented management of aid (OECD 2009a). The difficulty of “managing for development results” has to do with the scope of the necessary changes, namely: internal reforms, human resource development, reinforced evaluations, better accountability and improved linkage between results, on one hand, and planning and budgeting, on the other. Furthermore, the parties involved have few incentives for applying this principle. The slow progress made towards mutual responsibility should be attributed to the latter’s lack of concrete meaning. The Paris Declaration provided for setting up a framework to monitor results and to make donors and beneficiaries responsible, but very little has been done. For the Working Party on Aid Effectiveness, mutual responsibility should be a means for fostering national responsibility without replacing it, which is a risk especially for partners who depend heavily on aid.

34The efforts carried out to improve aid effectiveness do not meet the targets set for 2010. Beyond the problems related to its implementation, the Paris Declaration has also come under criticism for reasons of a fundamental sort.

3.3. Fundamental criticisms of the Paris Declaration

35Let us start by recalling two criticisms that, formulated in 2005 by the Working Party on Aid Effectiveness, were not part of the 2008 Accra Agenda for Action. The first has to do with the coherence of donor policies, a subject that, overlooked in the Paris Declaration, will be treated below; the second has to do with budget aid, and in particular general budget, which in theory complies fully with the principles of ownership, alignment and harmonisation. However, the impact of budget aid on poverty reduction is far from certain. It is often very hard to track the outcome of budget aid since it is highly fungible. Donors seem less and less inclined to provide budget aid.

  • 8  This study was conducted between 2006 and 2007 by a consortium headed by the Overseas Development (...)

36In 2008 criticism was directed at a point forgotten in both Paris and Accra, i.e. the political dimension of aid effectiveness (Maurer 2009; Booth 2009). The Working Party on Aid Effectiveness has warned: “There is an obvious concern that indicators and targets will assume importance in their own right, becoming a barrier to rigorous thinking and innovative practices for meeting the broader objective of aid effectiveness” (OECD 2008e, 27). The parties involved in cooperation are strongly tempted to reduce effectiveness to its technical dimension in order to avoid indispensable political discussions. According to the similar results reported in the Advisory Board for Irish Aid (ABIA) study8 (presented in Booth 2009), the process set in motion by the Paris Declaration has not reckoned with some major barriers to aid effectiveness, such as neo-patrimonial political systems and corruption. This study recommends that donors become more politically involved in partner countries with a broader range of parties (governments, parliaments, non-governmental and private organisations) so as to cope with the pernicious forces that stand in the way of a genuine reform of aid. A dialogue should be opened on sensitive political questions instead of using the latter as arguments for imposing conditions on aid.

3.4. The dilemma of aid to fragile States

37Beyond the problem of defining the term, fragile States are a major issue in aid effectiveness. The questions crop up of whom to address and how to intervene in a country in conflict, where State institutions no longer operate, the population no longer lives in security and the government lacks legitimacy. Development agencies face several dilemmas in such situations. They tend to work directly with the population in need, but this weakens even more the State’s ability to provide basic services. In situations when human rights are systematically violated, or when aid serves to sustain an autocratic regime, the question arises of whether to pursue aid or to subject it to tight political and economic conditions. At present most countries in the North think that aid should be maintained, lest the risks of destabilisation worsen. However, no agreement has been reached about how to maintain it.

38Several attempts have been made to draw up a global approach to dealings with such States. For example, DAC members adopted in 2007, as a follow-up to the Paris Declaration, the Principles for Good International Engagement in Fragile States and Situations. Emphasis was placed on State-building, but the practical application is still unclear (OECD 2008b). Chauvet and Collier (2006) have discussed the policies to be adopted. In order to help States put an end to their fragility, they recommend gauging the advances made in reforms on the timing of aid grants, coordinating aid among donors and establishing outside (e.g. by an international body) supervision of reforms. Results on the operational level have not yet been significant (OECD 2009a). Despite the advances made thanks to the Paris Declaration, the questions related to aid effectiveness in fragile States have not yet received an appropriate answer.

4. More policy coherence for development

39After describing the progress recently made towards more coherence in DAC countries’ development policies, we shall examine the achievements of the EU, which is deemed a “model” in this field.

4.1. Tracking down incoherence

40In the early 1990s the DAC started giving thought to the coherence of development policies adopted in the North. The policies conducted by countries in the North that have an impact on developing countries are to be made compatible with development goals and the reduction of poverty. Ultimately, the various policies adopted in the North should not impair aid effectiveness and should even have a positive impact on development.

41Since then progress has been made in analysing policy coherence for development, several reports having identified the constraints on coherence (OECD 2004). A milestone in this process was the OECD ministerial declaration adopted in June 2008 (OECD 2008a). Recognising the necessity of aid in the fight against poverty, the cooperation and development ministers professed their determination to relate the issue of development to other public policy fields, such as trade, agriculture, migrations, finance, environment, energy and security.

  • 9  In 2008 the ODA of the following countries was examined: Norway, France and Luxembourg. In 2009 re (...)

42What remains to be done is to assemble a toolbox for evaluating progress and to fine-tune the methodology for assessing policy convergence. OECD regularly evaluates the aid from DAC members through a peer review process (using experts from other countries) based on country reports made every four years.9 Since the early 1990s these reviews take policy coherence into account. OECD has used the reviews conducted from 2003 to 2007 to analyse the progress achieved.

43Using examples of “good practices”, OECD has formulated recommendations to its members for optimising coherence (OECD 2006; OECD 2008c; OECD 2008f). Progress has been examined with regard to three stages for improving policy coherence for development:

  • set objectives, make political commitments for improving the coherence of foreign policy towards developing countries and define strategic orientations. Most DAC countries have already moved beyond this stage. The EU, the Netherlands and Sweden have placed policy coherence at the centre of a global approach to development (OECD 2008d);

  • develop the mechanisms for coordinating policies and establishing a dialogue between ministries with a view to increasing synergy and reducing incoherence. The progress made by DAC countries in this field is variable. Quite diverse mechanisms have been set up, ranging from simple, informal coordination to the systematic analysis of the implications of bills of law on development. The Netherlands, where an authority has the duty of ensuring policy coherence, has made considerable progress;

  • control, analyse and inform the public and elected officials. This calls for major efforts, especially for reinforcing the analytical process. Progress has been recorded in the EU, the Netherlands, the UK, Sweden, Finland and Germany. In most DAC countries, however, there is no obligation to report to parliament on this issue.

44An analysis by sector offers us a less abstract view of policy coherence. The international community has reached a consensus on the importance of reducing poverty. A report by OECD (2001) presents a deeper analysis in relation to this objective. Another OECD report (2007) presents findings on improving policy coherence in relation to migrations and development.

4.2. The EU’s commitment to policy coherence

45Prompted by the work done by OECD, the EU worked out its own conception of policy coherence in 2005 (EC 2005). The objective is to reinforce the synergy between development goals and the policies conducted in 12 fields: trade, environment, climate change, security, agriculture, fisheries, the social dimension of globalisation and employment, migrations, research, the information society, transportation and energy. The European Commission (EC) drafts a report on EU policy every two years. Its first report, based on a questionnaire filled out by member States, provides information to the public and to parties active in development (EC 2007b).10

46The EC’s new report (EC 2009) points to obstacles impeding progress towards policy coherence, namely: the lack of political determination and the low priority assigned to poverty reduction in countries in the North. It recommends changing the approach adopted. Measuring the impact of a dozen policies on developing countries does not suffice. The EU must set targets and address major development issues. Concord has been keeping track of the coherence of EU policies and it regularly releases reports.11

5. Conclusion: the challenges of international cooperation

47In recent years international development cooperation can vaunt its part in the undeniable progress made in partially reducing poverty, improving the literacy rate and battling certain diseases. The Millennium Development Goals are still out of reach, however. Several factors together explain why so little progress has been made towards poverty reduction. The amount of ODA still falls short of the objectives set by the UN. Furthermore, much of what is counted as ODA does not go towards poverty reduction. Increasing aid effectiveness requires a genuine political commitment by the parties involved in development so as to transform the rationale that has been behind North-South relations for nearly 60 years now. The process for following up on the Paris Declaration provides a useful toolkit, but not enough attention has been paid to the political dimension of aid effectiveness. Meanwhile, the emergence of new donors has shaken up the international system of aid. These new players have to be fully involved in discussions on this issue. Finally, increasing the coherence of donor countries’ policies is still a condition for reaching development goals.

48Development cooperation also has to face the climate change challenge. The heated debates during the Copenhagen conference in December 2009 centred on reducing CO2 emissions, a cause of global warming. The International Energy Agency (IEA) predicts a sizeable increase in fossil fuel consumption, a major source of CO2 (IEA 2009). From 2007 to 2030 demand is expected to grow by 24% for petroleum, 42% for natural gas and 53% for coal, with this demand for fossil fuel energy being driven by emerging economies. In its 2007-08 report on human development the United Nations Development Programme (UNDP) shows that environmental degradation and global warming directly threaten the efforts made in favour of development and poverty reduction, whence a genuine challenge for cooperation and development. The poorest populations are the first victims of desertification, rising sea-levels and the higher frequency of climate catastrophes (UNDP 2007).

  • 12  The Global Environment Facility is the major one, with USD 74 million given to the Special Climate (...)

49Given the need to integrate environmental factors into economic and social development goals, DAC members have proposed backing adaptation measures in developing countries so as to give them the means for coping with the effects of global warming (OECD 2008h). Since 2006 OECD’s strategic environmental assessments have advocated that aid policies should take into account the environment, biodiversity, climate change and the fight against desertification (OECD 2006). The secretariat of the International Convention on Climate Change has estimated that the cost of adaptation will range from USD 28 billion to USD 67 billion, whereas the UNDP has referred to USD 86 billion per year. Several international funds exist, but with budgets far below these amounts.12

50Given this consensual approach, suggestions have been made for devoting thought to the objectives of international cooperation and even to development goals and models. The Center for Global Development (2009) has deplored the fact that the Copenhagen agenda did not sufficiently focus on backing and financing innovations in clean energy. Some experts advocate an overhaul of the dominant development paradigm as it relies on an idea of progress based on economic growth and modernity, which are not environmentally sustainable (Brooks, Grist, and Brown 2009). Rather than trying to make up for the effects of climate change, they call for a model of development that fully takes into account environmental exigencies.

Swiss aid: new orientations

Two federal offices manage most Swiss aid: the Swiss Agency for Development and Cooperation (SDC) in the Federal Department of Foreign Affairs and the State Secretariat for Economic Affairs (SECO) in the Federal Department of Economic Affairs. In 2008 for the first time the bills submitted by the Federal Council to parliament (2008a, 2008b) referred to a common general framework for defining the priorities of Swiss cooperation:

- coordination of development policy in the federal administration.
- endorsement of poverty reduction strategies in the countries assigned priority;
- support to fragile States;
- contribution towards a globalisation propitious for development;
- financial participation in multilateral organisations;
- increased cooperation with charities, research institutes and public/private partnerships in Switzerland;

Increased volume of aid

In 2008 Swiss aid amounted to CHF 2.02 billion, an increase in real terms of 6.5% over 2007. However, as seen in figure 5, the increase in ODA observed in recent years mainly corresponds to bilateral debt relief (especially in 2005 and 2006) and (since 2004) to the inclusion of the cost of asylum-seekers (OECD 2009d).

Figure 5: Debt relief and aid to asylum-seekers in Swiss ODA, 2002-08 (in CHF millions)

Figure 5: Debt relief and aid to asylum-seekers in Swiss ODA, 2002-08 (in CHF millions)

Source: SDC: http://www.ddc.admin.ch/​fr/​Accueil/​La_DDC/​Chiffres_et_faits/​APD.

Volume of aid debate

Switzerland has never committed itself to the UN’s 0.7% objective; but it did pledge, in 2002, to devote 0.4% of GNI to ODA (OCDE 2009c). In 2008 its donations amounted to 0.42% of GNI. In 2007 a coalition of non-governmental organisations launched a campaign for making Switzerland’s pledge reach 0.7%. The coalition presented a petition with more than 200,000 signatures in May 2008. A greater Swiss effort would be welcomed, since Switzerland’s rank among DAC members has fallen from 9th to 12th. At present the ODA/GNI ratio lies below the DAC non-weighted average.

The volume of aid has been the subject of a lively debate in the Swiss parliament. For the very first time members of parliament asked the executive to envision increasing aid to 0.5% of GNI. In its report to parliament on pursuing cooperation the Federal Council (2009) recognised the necessity of increasing Swiss aid but stuck with the 0.4% figure because of the downturn in the business cycle. However, it is making plans for a supplementary budget on multilateral aid in the coming years.

Reducing the dispersion of aid

In the Federal Council’s message to parliament in 2008 the number of “priority countries” was trimmed from 17 to 12 for the SDC and from 16 to seven for the SECO. The SDC concentrates on the poorest countries, while the SECO concentrates on middle-income countries (SDC/SECO 2009).a

Swiss cooperation focuses on a dozen of the approximately 30 themes on the DAC’s list. The DAC’s peer review of Switzerland has advised further streamlining the themes receiving priority Swiss aid (OECD 2009c).

a The countries with priority for technical cooperation and financial aid from the SDC are: Benin, Burkina Faso, Mali, Mozambique, Niger, Tanzania and Chad; Bangladesh, Nepal and the Mekong region in Vietnam; Bolivia and Nicaragua. Special programmes exist for the following regions or countries: Afghanistan, Mongolia, Cuba, the Great Lakes region in Africa and the areas under the control of the Palestinian Authority. The seven countries targeted for economic cooperation by the SECO are: South Africa, Colombia, Egypt, Ghana, Indonesia, Peru and Vietnam.

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Notes

1  DAC data from the statistical appendix of OECD 2009d.

2  Calculated from DAC statistics online at: http://stats.oecd.org/Index.aspx?DatasetCode=ODA_RECIPIENT_INCOME (accessed 4/1/2010).

3  OECD 2009d, statistical appendix, table 25.

4  OECD 2009d, statistical appendix, table 14.

5  OECD 2009d, statistical appendix, table 14.

6  The DAC records aid from some countries that do not figure among its members: countries that have joined OECD but not the DAC (Korea, Turkey, Poland and the Czech Republic), a few Arab countries (Saudi Arabia, the United Arab Emirates and Kuwait), Israel and Chinese Taipei. The aid from these countries amounted to USD 9.5 billion in 2008. The DAC also provides statistics on donations from the private sector, non-governmental organisations and international funds, but statistical aggregates only take into account the part corresponding to the public subsidies distributed by these organisations.

7  The BMGF sits on the committees of most public/private partnerships in the health field, such as the Global Alliance for Vaccines and Immunisation, and participates in international meetings: http://apps.who.int/gb/ebwha/pdf_files/WHA58/A58_DIV8-fr.pdf (accessed 30/11/2009). It plays a major role in certain programmes, especially those concerning “neglected diseases”: http://www.who.int/phi/public_hearings/second/contributions_section1/Section1_HerrlingPaul-Novartis.pdf (accessed 30/11/2009).

8  This study was conducted between 2006 and 2007 by a consortium headed by the Overseas Development Institute (ODI) and financed by ABIA.

9  In 2008 the ODA of the following countries was examined: Norway, France and Luxembourg. In 2009 reports were released on Austria, Ireland, Australia, Sweden and Switzerland. In 2010 the UK, Belgium and Germany will come under review. In 2007 the DAC conducted studies of the aid provided by the European Community, the Czech Republic, Spain, Denmark and Canada. These reports are available at: http://www.oecd.org/findDocument/0,2350,fr_2649_34603_1_119663_1_1_1,00.html (accessed 21/12/09).

10  In addition, see: http://www.eucoherence.org/ and http://europa.eu/scadplus/leg/en/lvb/r12534.htm.

11 . For the documents on policy coherence for development see: http://www.concordeurope.org/Public/Page.php?ID=69 (accessed 21/12/09).

12  The Global Environment Facility is the major one, with USD 74 million given to the Special Climate Change Fund from 2001 to 2007 and USD 74 million for the LDCs. In parallel, the World Bank set up the Strategic Climate Fund and the Pilot Program for Climate Resilience. Furthermore, the Bali conference decided in 2007 to create a fund for adaptation under the Kyoto Protocol, but no decision has yet been made about how to finance it.

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List of illustrations

Title Figure 1: ODA volume by country, 2008 (in USD millions)
Credits Source: OECD (2009d, statistical appendix, table 1, figure 1).
URL http://poldev.revues.org/docannexe/image/142/img-1.png
File image/png, 75k
Title Figure 2: ODA as a percentage of gross national income in certain DAC countries, 1980-2008
Credits Source: OECD: http://stats.oecd.org/​Index.aspx?DatasetCode=ODA_DONOR.
URL http://poldev.revues.org/docannexe/image/142/img-2.png
File image/png, 99k
Title Figure 3: Debt relief and aid to asylum-seekers as a percentage of ODA volume, 2008
Credits Source: OECD (2009d, statistical appendix, table 14)
URL http://poldev.revues.org/docannexe/image/142/img-3.png
File image/png, 93k
Title Figure 4: Percentage of tied aid in total bilateral ODA, 2008
Credits Source: OECD (2009d, statistical appendix, table 23).
URL http://poldev.revues.org/docannexe/image/142/img-4.png
File image/png, 65k
Title Figure 5: Debt relief and aid to asylum-seekers in Swiss ODA, 2002-08 (in CHF millions)
Credits Source: SDC: http://www.ddc.admin.ch/​fr/​Accueil/​La_DDC/​Chiffres_et_faits/​APD.
URL http://poldev.revues.org/docannexe/image/142/img-5.png
File image/png, 53k
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References

Bibliographical reference

Gérard Perroulaz, Claudie Fioroni and Gilles Carbonnier, « Trends and issues in international development cooperation »,International Development Policy | Revue internationale de politique de développement, 1 | 2010, 143-160.

Electronic reference

Gérard Perroulaz, Claudie Fioroni and Gilles Carbonnier, « Trends and issues in international development cooperation », International Development Policy | Revue internationale de politique de développement [Online], 1 | 2010, Online since 10 March 2010, connection on 25 September 2017. URL : http://poldev.revues.org/142 ; DOI : 10.4000/poldev.142

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About the authors

Gérard Perroulaz

Economist, Research Fellow at the Graduate Institute of International and Development Studies in Geneva.

Claudie Fioroni

Graduate student and winner of the 2009 EADI (European Association of Development Research and Training Institutes) Prize for Excellence in Development Studies.

Gilles Carbonnier

Editor-in-Chief of the International Development Policy Series and Professor of Development Economics at the Graduate Institute of International and Development Studies in Geneva.

By this author

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Copyright

Creative Commons License
International Development Policy is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

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