Comments

Thanks Camilla. I'm a big fan of legislation in this area. I think formal rules, such as law, can then establish informal rules (norms) of behaviour. These then structure how people behave, and can lead to better quality ODA, including improved monitoring and transparency. I did some research on this subject a few years back. What came out is that the challenge is how to draft, and then get past, a piece of useful legislation, which speaks to some of the issues you raise in your blog. The UK has had a lot of practice, with three Acts on ODA the UK International Development Act 2002 (which superseded the Overseas Development and Cooperation Act 1980); the UK International Development (Reporting and Transparency) Act 2006; and the International Development (Official Development Assistance) Target Act 2015. For the first Act, the people I spoke to suggested that factors for its success were that it was simple and brief, there was strong public support, political factors were aligned, and, crucially, at that time the Labour Party had a large majority in parliament. In the UK the movement of the Bill through to an Act was driven internally. In Canada, the Canadian Official Development Assistance Accountability Act 2008, was facilitated by strong NGO involvement. In my discussions with people, some of the lessons learned from the passage of this Act were the need to draft a technically sound piece of legislation that can withstand interpretation by an unwilling government, strong NGO and public support, and thinking ahead to what compromises may be made so that the Bill doesn't get watered down into an ineffectual Act.

A thought-provoking post, thank you Rachael. In the NZ case the movement of the semi-autonomous NZAID back into the Ministry of Foreign Affairs and Trade was partly touted to be more efficient. Yet administrative costs remain reasonably static (they even went up initially). NZ may be different to other countries, however, as it has strict rules about what can be allocated to administrative functions and what can't. As you argue, there doesn't seem to be much difference in administrative costs according to a separate or internal ODA programme. However, I think further differentiation is necessary, as there are two models of 'integration' - models one and two, which involve different degrees of integration and there may be different admin costs associated with each. There is a broader question here, also. I think the use of administration costs as a proportion of overall ODA misses the point. I know it is the standard approach donors use to measure so-called efficiency but it doesn't say much. It is also easy to game, as the questions Ben raises highlight. I would put efficiency numbers alongside tied aid numbers as some of the most unreliable data DAC has. DAC's own definition of efficiency might be useful to apply here: "Efficiency measures the outputs -- qualitative and quantitative -- in relation to the inputs. It is an economic term which signifies that the aid uses the least costly resources possible in order to achieve the desired results. This generally requires comparing alternative approaches to achieving the same outputs, to see whether the most efficient process has been adopted." This is a useful definition because it assesses the costs against what is achieved. So to actually measure efficiency in an aid programme, one could use the administrative cost but then gauge it against some high-level output or outcome achievements. Anyone know of any agencies that do this? Or have some ideas for what such an efficiency indicator might look like?

The idea of subsidies and monopolies are anti-competition and only serve the hierarchy not the PNG consumers who depend heavily on this commodity (rice). Obviously monopolies increase prices to gain more profit at the expense of citizens. Inflation is already running high in PNG and the monopoly is a bad, bad idea. PNG should look at opening up the market but with good regulatory bodies to prevent corruption, and let the market play its part in reducing price of goods and services to consumers. Jonah

Thanks very much Terence. I really appreciated David Hulme's idea about changing values. And I liked this point that he made in that post: "The MDGs were successful at generating sympathetic media coverage, particularly in rich nations, which helped to build support for aid and development. Today there is much wider recognition that, whilst poverty is slowly being eradicated, inequality is rising – which is a bad thing. The Sustainable Development Goals will provide more of a focus on poverty AND inequality in every country, rather than just extreme poverty in developing nations."

Thanks Cleo, great post. David Hulme's blog is excellent too.

The classification of the UK as the only remaining autonomous aid agency is based on the OECD's 2009 Managing Aid report, which identifies four separate models of aid organization used by OECD-DAC donors. In this report, the UK is identified as a "Model 4" (where a ministry or agency, that is not the ministry of foreign affairs, is responsible for policy and implementation), while Japan is classified as a "Model 3" (where a ministry is responsible for policy formation and separate executing agency is responsible for policy implementation). While you're right that JICA is a separate agency, my understanding is that the key difference in the classification is based on function - while DFID is responsible for both policy formation and implementation, JICA acts as an implementing agency for MOFA policy.

From 2005 to 2010 the AusAID administrative cost averaged 3.9% of ODA (see DAC Online Table 1). The increase in admin ratio from 2011 to 2013 was a sensible build-up in capacity to effectively use the planned increases in ODA volume. It is not surprising that the ratio has now dropped by 30% given the severe cuts to aid implemented by the Abbott Government.

Good read. It would also be interesting to know if the lower administrative burden inside the aid agencies has had any impacts on the amount of administration being done by implementing partners (and subsequent funding they receive to do this work). In other words, has the merger just shifted the administrative burden to the implementing partners thus painting a crude image of 'efficiency'? The other area which warrants some more analysis is whether the merger also impacts the modalities and types of aid funding (ie. bigger programs/ less contracts) and what this means for the amount of oversight and type of work being done by aid managers inside the organisation. A subsequent question might focus on what is the right amount of aid management and technical expertise within the aid agencies and whether there is a good equilibrium to be reached whether in an autonomous or merged Department. The answers to these questions will have important implications for aid effectiveness also.

Hi David, Good to hear from you. We have pretty good evidence to suggest that donations to NGOs do not serve as ideological substitutes to support for ODA. Specifically, at the unit of analysis of the Australian electoral district, there is a strong correlation between levels of surveyed support for ODA and the proportion of electorates' populations who donate to aid NGOs (based on actual donations data). We have a working paper on this here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2489713 And a blog summary here: https://devpolicy.org/putting-our-money-where-our-mouths-are-donations-to-ngos-and-support-for-oda-in-australia-20140902/ Some data caveats (as always) but still a pretty clear result. cheers Terence

"The UK is now the only OECD donor that organises aid in a separate government department." What about Japan with JICA? JICA is referred to as a 'quasi-government' organization; it is a separate aid agency but MOFA also delivers aid programs.

Hi Terence and Jonathan, An interesting fact and really looking forward to seeing the further analysis and your thoughts on which explanation is the best. A question / comment. How do you think donations interact with public attitudes towards government aid? Are attitudes to government aid aligned with donations, or are donations a substitute for those folks who are concerned for distant strangers but are more politically conservative? I know it's likely to be a bit of both, but I wondered with your (other?) data you could answer this? Cheers, David

I enjoyed what you wrote, this is the very same thing happening in Malawi. Corruption is at its peak, the elite being in the forefront of misusing the public funds.