Comments

While aid law and legislation in various donor countries provide an important framework for aid planning and delivery, we may be missing the point that aid itself, with its rules and constraints, may not be (any longer) the best instrument for helping developing countries. Traditional aid is bureaucratic, donor-driven and constrained by many political (and now security) concerns. Players other than governments are in the ascendency (NGOs, private sector investors, foundations, local capital, local civil society, etc.) and we should reduce our focus on "getting the rules right" for what is an old concept and focus instead on broadening aid flows and instruments. DAC rules and five-year donor "country strategies" are very much a 20th century construct, almost sovietish. Paul Hitschfeld Chair, Trade Facilitation Office of Canada (based in Ottawa, operating around the world).

Ian's view on Canada's "toothless" legislation is obviously consistent with my own on most such legislation. As you say, it's not quite clear what he takes to be the relationship between a Canadian ICAI and aid legislation. I don't think he could be suggesting that the creation of such an institution would somehow make the existing legislation more useful, but he might be suggesting that the legislation should be amended, or parallel legislation passed, to give the institution statutory independence. If so, it's worth underlining a point we made in our <a href="https://devpolicy.org/publications/policy_briefs/PB14AidLaw_whatisitgoodfor.pdf">policy brief</a> (p. 5), that the UK's ICAI has no basis in legislation. It is part of the executive branch of government, but is an "advisory non-departmental public body" which is "sponsored" by DFID but reports directly to Parliament. I am not in a position to judge the quality of its work or its impact on the quality of UK aid but, if it has been as successful as claimed, its success owes nothing to statutory independence.

Hi Vinny, I grew up in Lower Hutt, so I'm not really comfortable with dancing. However: Speaking as someone who, in a voluntary capacity, worked with MPs to get the last large aid/gni increase approved in New Zealand, I definitely agree: aid increases are hard to obtain. I'd also add that the NZ situation is much better than what we've seen in Australia. So I'll reiterate a point I've made publicly previously: the aid programme and the minister deserve credit for this. And I know NZ aid programme staff do a good job of turning dollars into outcomes. That said, under standard metrics, the increases--while better than nothing--aren't as much as the casual reader may have taken them to be from your comment. I felt I needed to point that out. Terence

Look forward to your response Terence and Jo! A personal, and *very* non-official, set of thoughts on why we celebrate small increases: a. We work really long hours, and need the smallest (positive, real) excuse to break into dance b. Next time you're in Welly, stop by the front-end of the Terrace and attempt a persuasive argument for a real positive increase in anything and let me know whether you feel like celebrating if you succeed (hat tip: you will feel like celebrating!) c. Because, puppies. (No, seriously - even small aid increases allow us to do <a href="http://goo.gl/oCJjG0" rel="nofollow">things like this</a>)

Thanks Vinny! It's great to have engagement from the aid programme. Jo and I will respond with a blog post next week. In the meantime, I just wanted to make one point now, because it is somewhat tangential, and I don't think it will make our actual blog response. You write that: "The last time we reported an increase in aid was when the aid budget for the 2015/16-2017/18 triennium actually grew by $220 million—an event that we did, in fact, celebrate here in the office as an astoundingly good outcome for developing countries." I hope the celebrating wasn't too over the top. As I showed at the time (link below) the increase was only just above the expected rate of inflation. And it actually represented a fall in ODA/GNI. As we said back then, considering the fate of Australian aid recently, this wasn't such a bad outcome, but I wouldn't call it cause for celebration. Relevant blog post can be found <a href="https://devpolicy.org/the-ups-and-downs-of-new-zealand-aid-budget-2015-20150529/">here</a> cheers Terence

A <a href="http://www.mcleodgroup.ca/2016/07/25/the-oda-accountability-act-what-happened/" rel="nofollow">timely blog</a> from Ian Smillie at the McLeod Group on Canada's Official Development Assistance Accountability Act - the law I am referring to in my comment above. I'm not clear in his blog whether he means the Act would be useful if Canada had an 'Independent Commission for Aid Impact'-type entity, or whether the Act is forever useless. Broadens the conversation out a bit: what mechanisms of scrutiny external to the executive are effective in improving ODA quality?

Thanks Matt, can you provide some info about concerns about rising levels of inequality in Fiji and, in particular, the extent to which increasing urbanisation is contributing to levels of poverty. I know that there is a particular concern about the minimum wage levels and we have yet to see how that will play out. Also, in Figure 1 can you explain what the difference between 'public' and 'government' investment.

Thanks, that's a good question. These comparisons are already adjusted for differences in purchasing power. So the actual global median household would have much less than $US 3,000 in their own currency converted at the market exchange rate. They would have the equivalent in local currency of what $3,000 would buy in the US. I’m assuming market exchange and purchasing power exchange rates are similar for Australia, but, as you point out, they are very different in developing countries, where prices are generally much lower (because labour is paid less). Take India as an example. In India, if you have $3,000 you can buy RP 180,000 at the market exchange rate of about Rp 60 to 1USD. But taking into account difference in purchasing power, the exchange rate is only <a href="http://data.worldbank.org/indicator/PA.NUS.PPP?locations=IN" rel="nofollow">Rs 17 to the dollar</a>, so if you were at the median income in India you would only get Rs 51,000. And that is only $US 850 at market exchange rates. Unimaginable but true.

The SDG initiative unfairly burdens poor countries with climate mitigation - see paper <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2812034" rel="nofollow">here</a>

I am hppay to hear about EAR FMNR initiative is really making change specifically towards restoring ecosystem.

Thanks Robin. Great to get a discussion going on this. Thanks for the greater analysis of the Pergau Dam case. It is an exemplar case of legislation's use and so necessary to include in any discussion of ODA legislation. You've obviously got better information sources than me on that one. However, on the overall point re: purpose, the people I spoke with for the minor piece of research I did cited the existence of legislation for purpose as useful in their work defending ODA for poverty reduction (as well as the scandal). So I think there is more to the story, particularly how rules shape people's perceptions (regardless of whether those perceptions are accurate) and therefore their actions. A correction in interpretation: I don't think legislating for purpose is the 'main' use of aid legislation. If I implied that, I didn't mean to. But I do think it should not be brushed off as not useful in legislation, particularly without any substantiation or empirical research on legislation's real-world impact (opposed to content analysis). Your analysis here on the Pergau Dam case contributes further. Overall, when it comes to ODA, governments are not accountable to voters: voters do not benefit from ODA, they find it hard to get good information about ODA's impact, and while they care about how it is spent, they do not really pay much attention to it. Scandals are rare and too few to ensure consistent and effective accountability. Hence the need for other mechanisms, and legislation is a useful one. I think this has been a really interesting discussion and I have much more to respond. But I'll leave it there. It is a great topic to learn more about. Perhaps a place for some solid case studies, using robust research design, examining the empirical impact of legislation? I think there are laws in place that have not had any real-world impact when it was anticipated they would, and it is important to include analysis of those in any research - hence the importance of good case selection. It would also be great to engage lawyers and also examine the massive literature on institutions to see what insights they can add. Something to add to the 'to-do' list?

I suspect everybody who has worked in a donor agency, myself included, has at some time made the same wish, while cursing the waste of aid involved in chopping and changing between activity management systems, or jury-rigging solutions to emerging problems with sticky tape and string. However, donor agencies' activity management systems have to serve a number of purposes simultaneously, with the main elements being project-cycle management, payment management and information management. In all these areas, each individual donor will generally have a quite specific set of requirements to meet owing to government-wide policies on financial management, project approval, procurement and results measurement and reporting. Usually they will also have additional information collection and reporting requirements to meet that flow from their governments' results frameworks for aid. In these circumstances, I think the best that can be hoped for is agreement on a common international reporting standard for activity information (which we have), agreement to achieve certain levels of compliance with that standard by certain times (which we sort of have, though the agreement has mainly been honoured in the breach) and agreement to invest resources in a global mechanism that would give everybody and anybody the ability to access and manipulate the information provided (which we lack). A better capacity to see what is being reported by donors should improve the quantity and quality of what is reported, and make it increasingly likely that donor's individual activity management systems, whatever their differences, will fully and promptly dump activity information and related documents into the global pool.