Towards development effectiveness:Putting aid in the right place

An agenda for HLF4

Development Results?Key principles for a results framework

- Democratic decision-making- Poverty Eradication- Social and gender equity - Self-sustained economies and decent work- Environmental sustainability- Rights and Justice

Operationalizing

Development Effectiveness

• PD/AAA have reduced ownership to country ownership• Using country systems was a major shift driven by

PD/AAA, and is a prerequisite for democratic ownership

• Conditionality still undermines democracy and development

• Formal conditionality has been reduced but replaced by donor-led diagnostics; performance or results-based allocations, and donor-driven technical assistance

From Country Ownership to Democratic Ownership

Recommendations for HLF4• Recognize, encourage and institutionalise the

participation of citizens, civil society and parliaments

• Use transparent and accountable country systems, including for decision-making

• Phase out all policy conditionality, including IFI macro conditionality

• Agree on mutually binding aid contracts under developing country leadership

• Revise the indicators of the PD to reflect democratic ownership

From Tied aid to pro-poor procurement

• Tied Aid reduces cost-efficiency, drives prices up by 15% to 40%• Aid tying undermines ownership and limits choice.• Untying made progress, but procurement outcomes have not

changed much • Two thirds of contracts awarded to Northern TNCs and

consultancies („reverse flows“ or „boomerang aid“)• Just one third of ODA has local economic impact, creates jobs

and income opportunities in the recipient country• ODA has failed to built the productive capacities that are

needed for ending aid dependence (UNCTAD 2010)• ODA has largely side-lined the poor – only 10% translated into

additional income; Riddell 2007)

Recommendations for HLF4• Donors should untie all aid to all countries• Donors should use country systems as the default

option• Local procurement: Increase the share of

contracts awarded to recipient country firms and commit to providing obligatory explanations when allocating contracts back to donor countries.

• Stop to impose liberalisation of Southern government procurement through reform programmes.

Conclusion

The Fourth High-Level Forum on Aid Effectiveness

must TRANSFORM AID into

A stimulus package for the poor

Thank you!