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Aid Effectiveness Network news

Newsletter - November 2005

Highlights

DFID Better Aid Week: 7th to 11th November

Thinking develops on scaling up

Case study on aid effectiveness in Vietnam

Aid Relationships

Poverty Reduction Strategies/Country-Led Approaches

DFID's Evaluation Department is setting up an HIV and AIDS evaluation for 2006. This will cover some aspects of aid effectiveness, including the advantages and disadvantages of spending targets and the challenges faced in promoting AIDS policy objectives while using a country led approach. For more information contact Julia Compton.

Uganda is reforming agriculture within its poverty reduction strategy. The strategy will address the Ugandan government's long-term plan to modernise agriculture and to increase production and productivity. This plan was recently evaluated by an Oxford Policy Management team.

A new DFID and Gesellschaft für Technische Zusammenarbeit (GTZ) paper sets out how to use the Principles of Poverty and Social Impact Analysis (PSIA) in Policy Cycles and Stakeholder Participation(246 kb). This highlights the roles of commissioners, practitioners and facilitators in the PSIA process. Contact Peter Poulsen for more information.

Draft guidance for undertaking a forecasted poverty impact assessment(123 kb) has been produced, drawing on DFID's experience with PSIA, as part of the Organisation for Economic Cooperation and Development (OECD) PovNet working group. This has encouraged harmonisation of methods, terms and concepts. Contact Peter Poulsen for more information.

Aid Harmonisation and Alignment

DFID Vietnam conducted a case study on aid effectiveness(114 kb). This analyses the views and intentions of partners in Vietnam on aid effectiveness. While donors strongly support moves to increase aid effectiveness, the report highlights their desire to go beyond discussion to concrete actions. More evidence is needed on the success of harmonisation and alignment activities.

DFID Fragile States team and the Yemen country office hosted a visit by the Government of Yemen to discuss lessons learned in harmonisation and alignment in fragile states(39 kb). This paper draws out some of the key messages and has relevance for other countries. For more information contact Lisa Phillips.

Mutual Accountability

The OECDDevelopment Assistance Committee's (DAC's) peer review of the UK's international development programme has begun. The DAC Secretariat will examine the work of DFID and other UK Government Departments on development over the next few months. This is the first peer review to include a non-DAC member (China) as an observer. Contact Felicity Rose for more information.

Aid Instruments

Policy Coherence

The Centre for Global Development has produced a new book -Give Us Your Best and Brightest. This describes how the migration of skilled people from poor to rich countries affects those left behind. It argues that migrants and receiving countries enjoy most of the benefits, and proposes policies for sharing these benefits with the countries of origin.

A study on why Zimbabwe is losing its graduates was carried out by the Southern Africa Migration Project. It examines the causes for Zimbabwe’s brain drain, and presents the results of a survey of final-year college and university students in Zimbabwe.

The European Union (EU) policy coherence network is meeting on 15 November to discuss the development of an EU action plan on policy coherence. Contact Anna Walters for more information.

Development Financing

Scaling Up

The International Monetary Fund (IMF) produced a paper called"Pity the Finance Minister: issues in managing a substantial scaling up of aid flows". This reviews the impact of higher aid flows on the competitiveness of aid recipients; the management of fiscal and monetary policy; the delivery of public services; behavioural incentives; and the rate of growth of the economy.

The IMF produced a paper onthe macroeconomic challenges of scaling up aid to Africa. This provides a checklist of the macroeconomic challenges that low-income countries are likely to face if they receive significantly higher official assistance. It identifies issues that need to be considered when preparing a long term macroeconomic projection for a country involving a significant increase in aid.

The Institute of Development Studies produced a briefing paper onincreased aid: minimising problems, maximising gains. This argues that the political consensus on scaling up among donors is weak and that if serious attention is not paid to expanding the absorptive capacity of developing country governments before development funding is increased, the case for aid may be undermined altogether.

The Centre for Global Development published a working paper onfiscal and institutional implications of large aid increases. This discusses the possible downsides and benefits of increased aid, and highlights the importance of aid effectiveness.

The Paris Club signed adeal with Nigeria to cancel its $30 billion debt by March 2006. This deal is dependent on Nigeria sticking to the path set out in its Policy Support Instrument with the IMF.

Aid Volumes and Allocation

DFID has been reviewing aid allocation issues, in particular what steps it can take to tackle the unsystematic flow of bilateral assistance and associated problems of aid "orphans and darlings", including through multilaterals and better aid allocating models. A DFID paper on the subject will be produced early in 2006. More information can be found on What can DFID do?(36 kb) and Role of UN agencies and International Financial Institutions (IFIs)(15 kb). Contact Nick Highton for more information.

Other Aid Effectiveness Information

The Centre for Global Development wrote an articleReforming development assistance: lessons from the UK experience, written by the Centre for Global Development's Senior Program Associate Owen Barder (a former director of information, communications and knowledge at DFID).

Recent and Upcoming Events

DFID's Better Aid Week is running from 7-11 November. A range of events are planned to encourage all DFID staff to focus on what aid effectiveness can achieve, and their role in making DFID's aid more effective. Contact Roman Puchkov for more information.

DFID are sponsoring an Overseas Development Institute (ODI) workshop on country level mutual accountability mechanisms(53 kb) on 17-18 November. This will involve government, donor and civil society representatives from Afghanistan, Vietnam, Tanzania and Mozambique. Contact Anna Walters for more information.

If you want to keep abreast of the latest in aid effectiveness, please e-mail Louise Mellor who will add your name to the mailing list. Please also let us know of any news you have which relates to Aid Effectiveness. We will be glad to publicise anything you are doing.

DFID Department for International Development