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Aid Effectiveness Network news

Newsletter - December 2005

Highlights

European Union (EU) consensus on development

South East Asian perceptions on aid effectiveness

DFID 'How To Notes' on how to use information to strengthen policy making.

Aid Relationships

Poverty Reduction Strategies/Poverty and Social Impact Analysis

The first Joint Donor Poverty and Social Impact Analysis (PSIA) Capacity Building Design Meeting was hosted by DFID's Poverty Analysis and Millennium Development Goal (MDG) Review (PAM) team in November. Participants discussed harmonised approaches on use of evidence in partner countries to feed into more participatory and transparent policy making process. A follow up meeting will take place in Germany in January. Contact Peter Poulsen for more information.

A Training and Capacity Building Workshop on Pro-Poor Growth and PSIA took place in Tunis, attended by representatives from African governments, the African Development Bank, DFID and other donors. Contact Peter Poulsen for more information.

Conditionality

An ActionAid International report onChanging course: Alternative approaches to achieve the MDGs and fight HIV/AIDScriticises International Monetary Fund (IMF) conditionality. The authors argue that IMF-imposed macroeconomic policies are hindering development, and suggest alternative economic policies and approaches. The authors argue that there is often lack of knowledge of such alternatives, especially within aid-receiving countries.

Aid Instruments

Poverty Reduction Budget Support

Sector Budget Support was discussed by donors at a Strategic Partnership with Africa (SPA) workshop(54 kb) in Dublin in October. The report from the Chairs of the SPA working group(19 kb) highlighted the importance of sector budget support for some donors, and made initial steps towards developing SPA good practices guidelines. A follow up workshop will take place in Ghana in January, prior to the SPA plenary. Contact Peter Colenso for more information.

Mokoro produced a report on Effective aid and decentralization in Ethiopia(109 kb (report courtesy of Mokoro)) considering concerns on aid and direct budget support (DBS). It suggests that DBS would help increase aid to Ethiopia, but notes that many donors are reluctant to provide DBS, perceiving its link with service delivery as too tenuous.

Development Co-operation Ireland (DCI) produced a study onAid Modalities in Ethiopia. It provides an assessment of the changing aid environment in Ethiopia during 2002-2004, and reviews the aid modalities used by DCI in terms of their relevance and effectiveness. The report recommends a shift towards increased sector and direct budget support in Ethiopia.

Policy Coherence

The EU informal network on Policy Coherence for Development met on 15 November to discuss the development of an EU work programme. The Netherlands has produced a draft which is under review, and will be put to the Council of the European Union's (the Council's) Working Group on Development (CODEV) in early next year by the Austrian Presidency. Contact Anna Walters for more details.

The UK Presidency is funding a consultancy to map the Council's decision making processes in the twelve thematic areas identified in the Council conclusions on Policy Coherence for Development. These include areas where the EU has policy making competence on behalf of all member states (e.g. trade and agriculture). It will feed into the above EU work programme. Contact Anna Walters for more details.

Global Funds

DFID's Global Health Partnerships Team, Policy Division, has produced two-page briefing notes on each of its seven key global health partnerships(127 kb), including: the Global Fund to fight AIDS, Tuberculosis and Malaria, and Roll Back Malaria.

Development Financing

Scaling Up

DFID has submitted its response to the annual EU Monterrey Questionnaire, which details member states' commitments for achieving the Millennium Development Goals, including on aid volumes. The results will be published in March 2006 and discussed by Development Ministers in April 2006.

A new Africa Catalytic Fund (ACF) was proposed in the World Bank’s Africa Action Plan, which forms part of the World Bank’s response to the scaling up commitments made at Gleneagles in June. It will be financed by voluntary contributions from World Bank members, and the UK is the first country to pledge support to the ACF, providing a £200 million contribution.

Aid Volumes and Allocation

The USMillennium Challenge Corporation board recently met to select countries eligible to apply for 2006 funding. New papers from theCentre for Global Development Millennium Challenge Account (MCA) Monitor initiative consider which countries are likely to qualify.

The Asia Development Bank (AsDB) has approved three initiatives as part of its Innovation and Efficiency Initiative. These include new approaches to cost sharing and expenditure eligibility, financing instruments and local currency lending. Contact Gerry Duffy or read theAsDB Newsletter for more information.

Multilateral Aid Effectiveness

TheGeneral Affairs and External Relations Council (GAERC) met in Brussels on 21-22 November. Development Ministers agreed a declaration onThe European Consensus on Developmentwhich sets out for the first time a common framework for European Commission and EU development. Other issues discussed included development priorities for the forthcoming EU-Africa Strategy, and conclusions on improving the effectiveness of EU external assistance.

The World Bank's independent Operations Evaluation Department has produced the reportImproving the World Bank's Development Effectiveness: What Does Evaluation Show? This evaluates the effectiveness of World Bank assistance and states how it could be improved, and the approach has widespread applications for other development agencies.

Other Aid Effectiveness Information

DFID South East Asia have produced an analysis of aid effectiveness perceptions in 5 countries in South East Asia(171 kb). Although aid effectiveness debates are not well developed in most country contexts, they have been strengthened over recent years, and there are good opportunities to continue this in the future. The country case studies are: Burma(137 kb), Cambodia(177 kb), Indonesia(212 kb), Sri Lanka(191 kb) and Vietnam(132 kb). Contact Tom Beloe for more information.

DFID's Poverty Analysis and MDG Review (PAM) team have produced a series of How To Notes. These will help DFID make better use of information to strengthen policy making in developing countries. These give background information on each topic along with examples of case studies, and provide a list of resources where more detailed information can be obtained. The first How To Note is entitled How to use evidence to strengthen policy making(428 kb). Contact Emily George for more information including the other How To Notes.

Management for Development Results (Organisation for Economic Co-operation and Development (OECD)) have produced a sourcebook which compiles 20 illustrations of how different groups have applied the principles of managing for results. Since the 2002 Monterrey Conference, the development community has been focusing on managing its work so as to achieve the maximum development results. Contact Rachael Beaven for more information.

A joint study entitledLessons learned on the use of Power and Drivers of Change, Analyses in Development Cooperationcommissioned by the OECD Development Assistance Committee (DAC) GOVNET (Governance Network) Task Team was presented to GOVNET in October. The study highlighted how Power and Drivers of Change studies can influence donor policy and improve aid effectiveness.

DFID's White Paper team has started work on the new 2006 White Paper on International Aid. This will address several aspects of aid effectiveness including country led approaches, aid instruments and policy coherence. Contact Jas Malhi for more information.

Recent and Upcoming Events

Better Aid Week took place from 7-11th November in DFID's London, East Kilbride and country offices. Contact Lucy Vallance for further details.

DFID sponsored an ODI workshop on country level mutual accountability mechanisms, involving government, donor and civil society representatives from Afghanistan, Vietnam, Tanzania and Mozambique in November. A seminar will be held in early 2006 to disseminate findings. Please 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.

All the best,

James Bird
Louise Mellor
Anna Walters

DFID Department for International Development