August 29, 2012
This is a joint post with Edward Collins. Can we assess ag aid quality? The short answer: sort of. For at least a decade, aid effectiveness has been in the spotlight because of concerns that, in some cases, aid may do more harm than good and, more recently, because of growing budget pressures. In 2005, donor and recipient countries agreed on a set of principles for more effective aid and a process to monitor implementation of those principles with the Paris Declaration on Aid Effectiveness. Based on these principals, and with the objective to provide an independent evaluation of donor performance, Nancy Birdsall, Homi Kharas, and colleagues launched a joint Center for Global Development and Brookings Institution project to assess the Quality of Official Development Assistance, QuODA for short. Now in its second edition, this project motivated CGD colleagues Amanda Glassman and Denizhan Duran to apply the QuODA methodology to health aid and now, we’ve done the same thing for agricultural aid. It is an apropros time to examine the quality of agricultural aid because of the renewed interest in agricultural development triggered by the food price spikes of 2007-08 and sustained by the predictions of some that the long-term trend of declining commodity prices may be coming to an end. The Food and Agricultural Organization of the United Nations, for example, found that food production will have to rise by 60 percent by 2050 to rising demand due to growing populations, increased incomes, and the diversion of food crops for energy. There was an uptick in donor investment in the sector, but the chart suggests that the increases in aid are already tailing off, with both the levels and the share well below the levels reached during the last major commodity price spikes in the 1970s. In marked contrast to the L’Aquila summit in 2009, where the G8 pledged $20 billion over three years for a new food security initiative, most of the money on the table when President Obama announced the G8’s New Alliance for Food Security and Nutrition in Washington in May was $3.5 billion from the private sector. In sum, the combination of growing food security challenges and stagnant or shrinking budgets makes the effectiveness of agricultural aid even more critical. But assessing the quality of aid is not easy so, before turning to the results of our efforts, a few caveats are in order. First, the measures that both the Paris Declaration monitoring survey and the QuODA project use are indicators of donor efforts to improve the quality of their aid. They are not direct measures of effectiveness and donors and recipients need to put significantly more effort into monitoring and evaluating the actual impacts of aid. Second, methodological problems arise at the sectoral level because much of the information from the Paris Declaration surveys is only available for aggregate ODA. Thus, of the four QuODA dimensions, we can only assess donors on three:
- Maximizing efficiency
- Reducing burdens on recipient countries
- Transparency and learning.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.