The future of aid reform and concerns surrounding the impact of the financial crisis on foreign aid policy
On December 17, GMF hosted a briefing on Capitol Hill with Congressional staff to discuss the future of aid reform and concerns surrounding the impact of the global financial crisis on foreign aid policy. At the event, Alex Wilks, director of the European Network on Debt and Development, and Sean Mulvaney, director of GMF's Economic Policy Program, presented the current debate on these issues in the United States and Europe, specifically addressing barriers to better donor harmonization and examples of good aid policy practices (using the example of the United Kingdom's Department for International Development (DFID)).
During discussion, Wilks underlined that due to the anticipated slowdowns in investment, trade, and growth, economic inflows to developing countries are likely to cease. He pointed out that in this climate of fragility, governments must maintain their foreign aid commitments as a life-line to impoverished communities, and deliver aid more effectively such as through joint assistance strategies and alignment with recipient country systems. Linking aid policy to the broader foreign policy context, Alex stressed that maintaining donor commitments on both sides of the Atlantic is not only a matter of ensuring security, but also about upholding global stability. To work toward achieving greater aid effectiveness, Wilks cited the importance of implementing the internationally recognized Accra Action Agenda, the joint policy framework agreed upon at the Third High-Level Forum on Aid Effectiveness in Accra in September 2008.
The questions and subsequent discussion with participants focused on the recent progress made by the British aid system, as a model to help inform aid policy discourse in the United States. Congressional staff explained that to a large degree, a lack of a constituency for foreign aid makes it difficult for Members to devote time and resources to this policy area. Additionally, staffers raised concerns over how to ensure transparency and accountability, and how to effectively monitor and evaluate the use of funds. Wilks pointed out decentralized decision-making (the U.K. model) allows local groups to make more informed decisions about how aid money is spent, and cited Mozambique as an example of a recipient country where aid is being successfully monitored. Both Mulvaney and Wilks stressed that foreign aid actors should base their aid strategies on comparative advantage and that when implementing on the ground, greater flexibility is needed.