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Multilateral aid effectiveness

Background

• It is important to improve the effectiveness of the multilateral system for aid and development in order to reach the MDGs. About half of DFID's budget goes to multilateral agencies (including the United Nations, European Commission and World Bank), and we are increasingly asked to provide evidence that this is a good use of resources.
• During 2004, DFID established a framework for assessing the way the multilateral organisations work. 23 international organisations were assessed, including five Multilateral Development Banks, 12 UN organisations, five humanitarian agencies and the European Commission. DFID officials conducted the assessments, in close consultation with the organisations themselves. The Multilateral Effectiveness Framework (MEFF) is the first objective, comparative study of this kind by DFID

Methodology

• The MEFF focuses on organisational effectiveness, that is the systems that organisations need to have in place to produce results. The assessment framework looks at the way that the multilaterals are organising themselves to improve their internal performance, their focus on country level results and their relations with governments and other international organisations. Its main limitation is that, while it assesses whether the necessary conditions are in place for multilaterals to achieve results, it does not assess the institutions’ actual impact. It is thus only part of the picture on aid effectiveness.
• The key methodological instruments are a checklist and a scorecard that uses a simple "traffic lights" system (red, amber, green) to score an agency's effectiveness in each area.

Results

• Multilateral agencies have made great strides in improving the way they work, but there is still room for improvement. The pace of reform varies between agencies, with some undertaking 'big bang' reforms and others adopting a more incremental approach.
• There are common weaknesses regarding:

• Working more closely with national strategies, systems and procedures
• Systematic monitoring of results and impact at country level reporting on the results achieved.
   

What next?

• The MEFF results have greatly enhanced DFID's understanding of the multilaterals and have enabled the development of a more strategic, focused and differentiated approach to promoting organisational effectiveness. However, DFID is aware of the need to supplement this approach with information on implementation and behaviour at country level.
• DFID will use the information to:

• focus efforts on strengthening areas of weakness
• work with other bilateral aid agencies to jointly advocate further improvements
• internally, the information will contribute to consideration of financing decisions, where the MEFF will provide only one of the criteria amongst others
  the MEFF summary reports have identified three areas for tracking progress over the next two years, and reporting against these areas will be used as part of DFID's formal performance contract - the Public Service Agreement
• the 3 areas identified for continued MEFF monitoring will also feed directly into Institutional Strategy objectives and will be monitored as part of IS annual reviews

• DFID will also develop a broader range of instruments to assess multilateral performance on the ground. This work has added urgency in light of the increased aid that was agreed at Gleneagles in 2005, and the need to identify suitable multilateral and bilateral channels for funding.

Last updated: 13 February 2006

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