by Yash Tandon – http://www.bdafrica.com/index.php?option=com_content&task=view&id=9072&Itemid=5821
August 1, 2008: At first glance, the Paris Declaration (PD) looks benign. It recognises faults of the present system, and sets out sensible principles. Why, then, are the developing countries not all that excited? Many have signed on to the PD, but apparently without fully analysing the implications of its proposals.
Meanwhile, awareness is growing among both civil-society and government actors in the developing world that not all that glitters about the PD is gold, and that underlying the declaration could be another agenda not readily transparent at first reading.
The issue of aid effectiveness was put on the global agenda primarily for three reasons. One was the need to simplify and rationalise the complex system of aid administration and to reduce transaction costs.
Second, citizens of donor countries are asking why their governments are giving “so much money” to, for example, Africa in spite of rampant corruption, human-rights violations and very little progress in terms of fighting poverty.
Third, the present aid architecture is dominated by the rich countries of the OECD and thus suffers from a serious democratic and legitimacy deficit.
The OECD took the lead to reform the aid architecture. In March, 2005, an intergovernmental High Level Forum convened by the Development Cooperation Directorate (DAC) of the OECD adopted the PD, which aims at taking “far-reaching and monitorable actions to reform the ways we deliver and manage aid”.
The PD recognises that, at present, accountability requirements are often “harder on developing countries than donors” and that “aid is more effective when partner countries exercise strong and effective leadership over their development policies and strategies”.
It goes beyond previous joint statements on general intentions, laying down a “practical, action-orientated road map to improve the quality of aid and its impact on development.” 56 commitments are organised around the five key principles of ownership, alignment, harmonisation, managing for results and mutual accountability.
The PD sets out 12 indicators to monitor progress. Targets for the year 2010 have been set for 11 of the indicators.
The PD promotes a “model of partnership” meant to improve transparency and accountability at different levels. At the international level, the PD provides a mechanism by which donors and recipients of aid are held “mutually accountable”, and publicly monitored. At the country level, it encourages donors and partners to jointly assess mutual progress in implementing agreed commitments.
Nonetheless, the PD is not a benign document. Roberto Bissio of “Social Watch” wrote the most critical assessment so far; and he did so on assignment from the UN Human Rights Council’s High-Level Task Force on the Implementation of the Right to Development. Lack of adequate UN involvement is only one serious problem . Others include dubious criteria for measuring performance, governance and related issues.
The PD’s performance conditionalities are defined by the donors in conjunction with the World Bank. If “recipient” countries do not perform, they are subject to penalties. If “donor” countries do not perform, there is no penalty. In normal business transactions, both sides of a deal run risks.
The subprime mortgage crisis in the USA and Europe is an example in case: banks and borrowers are paying the price. But in the aid architecture proposed by the DAC, only the “recipient” ever bears risks.
In a similar vein, “compliance tests” are administered by the Word Bank without regard for the economic and social policies of the “owner” countries. Such tests – on public procurement, for example – are imposed from outside.
That is also true of the “rating system”, which is supposed to measure the “effectiveness” of aid in relation to public-finance management and procurement systems. This system is based on methodology provided by the DAC and the World Bank. It is to be used wherever donors are not satisfied with “recipient” countries’ own systems of reporting. Let us be clear: this is not about bureaucratic detail, but power.
Should donors be uncomfortable with a “recipient” country’s public procurement system, for instance, they would want to enforce an open-tender system for international procurement.
It will come as no surprise that, on issues of governance, it is once again the donors’ procedures that determine the methods of harmonisation, with neither input from developing countries, nor even an understanding of their reality.
Although the PD talks about “ownership”, its thrust goes in the opposite direction. For example, donors want to decide whether a particular procurement item is to be tendered internationally, nationally or locally; and whether it is open to the private sector or to the state sector or both.
Should donors disagree among themselves, with one favouring the private sector and another preferring the state procurement, for instance, the matter will be “sorted out” by the donors, and their decision imposed on the supposed “owner” country in the name of aid efficiency.
Another disturbing issue is the PD’s shift from project lending to programme based lending. There are three inter-related issues here: the pooling of donor resources; the injection of such funds into the national budget of a “recipient” country (“direct budget support”) along lines defined by the donors in a Joint Assistance Strategy (JAS) for each individual country, and the scaling-up activities and funding, according to the donors’ collective assessment of good or bad policies.
Of course, assessments will depend on whether the “recipient” countries engage in policies acceptable to the donors, for example, regarding health matters and the Millennium Development Goals. Should the developing countries not meet externally defined targets, budget support would be reduced or discontinued, a form of collective sanctions.
These are only some of troubling implications of the “aid effectiveness” project. The conclusion is unavoidable: under the pretext of making aid more effective the Paris Declaration project is a form of collective colonialism by Northern “donors” of those countries in the South that (because of their weakness and vulnerability and psychology of “dependency”) may allow themselves to be subjected to it at the Accra September Conference.
Yash Tandon is the executive director of the South Centre, an intergovernmental policy think-tank of developing countries based in Geneva.
