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Udenrigsudvalget 2014-15 (1. samling)
URU Alm.del Bilag 98
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Aid in a Post-2015 World

UNU-WIDER summary and overview

27 May 2014

Abstract:

The ReCom – Research and Communication on Foreign Aid – programme

produced 247 original studies. More than 300 researchers from 59 countries came

together and provided evidence on what does and could work in development, and

what can be transferred and scaled up. ReCom’s five thematic areas are summarized in

comprehensive Position Papers on: Aid, Growth and Employment, Aid and the Social

Sectors; Aid and Gender Equality; Aid, Governance and Fragility; and Aid,

Environment and Climate Change. ReCom research was communicated and tested in

seven international Results Meetings, 83 seminar and conference presentations across

the world, and an impressive series of academic outlets. The ReCom website

http://recom.wider.unu.edu/

provides access to working papers, videos and research

summaries. Together this material offers an unprecedented insight into what moves

societies forward, what achieves change, and what aid can and does achieve.

Following the guidelines established at the outset, ReCom research was not meant to

simply compile small ‘best practice’ projects, hoping that these might add up to

systematic large scale impact. Instead the focus has been on synthesizing what aid has

produced in terms of outputs and outcomes and on contributing to systematic

thinking and reflection with a view to improving existing knowledge about

development assistance. An old saying suggests that success is not doing extraordinary

things – but doing ordinary things extraordinarily well. High impact aid is associated

with doing many ordinary things, but also with doing the extraordinary, in less than

ideal circumstances. In aid’s daily practice, context, political acumen and sequencing

are indispensable to complement technical proficiency and expert identification of

needs. As we approach 2015, the task of achieving and sustaining large-scale impact –

‘going to scale’ – stands out as aid’s greatest challenge.

ReCom – Research and Communication on Foreign Aid

wider.unu.edu/recom

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About ReCom

ReCom–Research and Communication on Foreign Aid is a UNU-WIDER co-

ordinated research programme implemented over 2011-2013 in partnership

with Danida (Ministry of Foreign Affairs of Denmark) and Sida (Swedish

International Development Cooperation Agency). The Danish Institute for

International Studies (DIIS) and the UNU-WIDER global network of partner

institutions and researchers were also involved in ReCom research. The aim of

the programme was to research and communicate what works and what can be

achieved through development assistance. For this purpose, a specific

programme website

wider.unu.edu/recom

was created.

People-to-people knowledge sharing was a central part of the overall communication strategy of

ReCom. The ReCom results meetings anchored the communications activities. They brought together

researchers, practitioners and policy makers to exchange knowledge on key development and aid issues.

During the programme period, the following seven ReCom results meetings took place in Copenhagen

and Stockholm:

•

’Aid, Growth and Macroeconomic Management’,

Copenhagen, 27 January 2012

‘Democracy and Fragility’,

Stockholm, 10 May 2012

‘Jobs – Aid at Work’,

Copenhagen, 8 October 2012

‘Aid and the Social Sectors’,

Stockholm, 13 March 2013

‘Aid and Our Changing Environment’,

Stockholm, 4 June 2013

‘Challenges in Fragility and Governance’,

Copenhagen, 23 October 2013

‘Aid for Gender Equality’,

Copenhagen, 16 December 2013

Specific ReCom contributions to the research literature on aid to date include 224 UNU-WIDER

working papers and 23 DIIS studies. Thirteen of these contributions have already found their way as

individual articles into academic journals such as the African Development Review, Journal of

Development Studies, Journal of Globalization and Development, Political Science & Politics, and

World Development. ReCom studies have also been featured in the 2013 World Development Report

and include a book volume published by Oxford University Press. Eight journal special issues – of

World Development, Development Policy Review (2), the Annals of the American Academy of

Political and Social Science, the Journal of Globalization and Development, African Development

Review, Third World Quarterly, and Public Administration and Development – are forthcoming;

and nine journal special issues and book volumes are under preparation or review.

UNU-WIDER gratefully acknowledges specific programme contributions

from the governments of Denmark (Ministry of Foreign Affairs, Danida) and

Sweden (Swedish International Development Cooperation Agency—Sida) for

ReCom. UNU-WIDER also gratefully acknowledges core financial support to

its work programme from the governments of Denmark, Finland, Sweden, and

the United Kingdom.

UNU World Institute for Development Economics Research (UNU-WIDER)

Katajanokanlaituri 6 B, 00160 Helsinki, Finland

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Summary

Much is said in both the academic literature and public press about the failures

and limits of aid. Yet, aid has worked in many areas and could work even

better in others.

ReCom’s findings

confirm this and speak to core issues on

the post-2015 development agenda.

Aid as emergency

humanitarian assistance

is widely understood and

accepted. Displacement of people through conflict or droughts, floods and

famines are legitimate reasons for the international community to help. At the

same time, the rationale for aid goes beyond the moral imperative to

supporting development processes – so societies become more resilient to

disaster, and less prone to conflict.

Aid to the social sectors

(education, health, water and sanitation and social

protection) has produced an impressive number of policy innovations and

successful outcomes over the past 30 years – significant progress towards

universal primary education, a remarkable achievement in increasing children’s

immunization, and a fall of nearly 50 per cent in maternal mortality. All this has

been achieved despite a rising population.

Important strides have also been made towards the ‘MDG agenda’ – keeping

throughout in mind that far too many people remain in poverty. Moving

forward, aid to the social sectors must continue, applying lessons learnt in

implementing the 2015 MDG agenda – especially in transferring best practice

between countries in social protection and in sharing advice on scaling up from

small to large interventions.

Aid for gender equality

is critical to achieving women’s fullest contribution

to economic, social and political life. Ensuring girls’ secondary education;

promoting better reproductive health and access to family planning; increasing

women’s control over and ownership of assets; putting better employment

prospects in place; supporting women’s leadership; and preventing violence

against women and girls – are all key areas. To achieve more requires

mainstreaming gender equality and mobilizing more funding, both aid and

domestic resources. This will deliver progress for women at scale rather than

remaining at the project level.

Aid contributes to long-term growth.

An inflow of aid of the order of 10

per cent of GDP spurs the per capita growth rate by more than one percentage

point. ReCom analysis of the aggregate evidence shows a more than seven per

cent annual rate of return on aid over 35 years. Building up physical and

human capital, technology and well-functioning institutions requires

investment. These are cumulative processes. Sending a child to primary school

brings most of its economic benefit in future decades as young people enter

the labour force. The full results of aid can only be assessed over the long

term, and long term results have arrived.

Summary | 1

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Many former low-income aid-recipients are now middle-income countries –

and in the next 10 years 36 out of 70 IDA (International Development

Association) recipients will ‘graduate’ out of aid recipient status, on present

forecasts. While these are significant results, growth must become more

inclusive. ReCom has highlighted

the need for remunerative employment,

especially for young people – the surest route out of poverty. Higher priority to

structural transformation

is required to help move people from less

productive into more productive sectors and occupations. While aid to

agriculture

has declined in recent decades, improving agricultural productivity

remains as central to food security and human well-being as ever; and

agricultural employment (and moving up the value chain into agro-processing)

is crucially important in aid recipient countries. Employment generation and

structural transformation have not, however, featured strongly in donor

priorities. The UN High Level Panel calls for a

‘quantum leap in economic

opportunities and a profound economic transformation to end extreme poverty and improve

livelihoods’.

This call will be in vain unless policy priorities are revisited.

As national governments extend their work with an increasingly complex set of

development partners on the structural transformation agenda, social sectors

and social protection will need continued financing. Growth lifts revenue and

potentially allows such spending to be financed from domestic revenue –

although the overlapping groups of least developed (LDCs) and low-income

countries (LICs) will continue to need significant external support in the

coming decades. One major innovation, primarily in Latin and Central

America, are

cash transfer programmes.

These have largely been financed

from taxation, they have shown results, and this innovation should be spread

across Africa.

Domestic resource mobilization

through taxation and improved natural

resource management is needed to finance human capital development and

social protection, even in poorer African countries. This is particularly so

where countries have newly discovered minerals – such as oil and gas.

Going to scale in human development and structural transformation requires

public institutional capacity – not just ‘looking like a state’ but ‘delivering like a

state’, a key insight from ReCom research. A ‘capability trap’ characterizes

many states with stagnant or declining capacity. The

governance and fragility

studies under ReCom disaggregate governance into key components and

provide many examples of work on Peace- and State-building Goals –

legitimate politics, security, justice, economic foundations and revenues and

services.

An important ReCom result is that development aid helped promote the

democratic transitions in Africa in the 1990s. Yet, a residue of hard policy

contexts remains as a result of fragility and armed conflict. Development aid

has to be better aligned with peacekeeping and post-conflict strategies.

Securing physical security is critical – in fragile states economic development,

humanitarian concerns and security all intersect. The gender dimensions of

post-conflict reconstruction also need stronger emphasis. Only six per cent of

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300 ceasefire agreements, peace accords and power-shring arrangements since

1989 make reference to sexual violence.

environment and climate change

ReCom finds that the main

institutional initiatives (Reducing Emissions from Deforestation and Forest

Degradation – REDD; the Clean Development Mechanism – CDM, the

Global Environment Facility – GEF and the Green Climate Fund – GCF) are

basically sound in conception. Yet, they are neither backed by appropriate

policy frameworks at the global level nor sufficiently funded to ensure major

impact. In addition, ReCom stresses the need for more effective international

action in agriculture.

A vital area for sustainable – green – development policy is

energy

use. To

develop, poorer countries will require more energy. Currently, middle income

developing countries use cheap and environmentally ‘dirty’ energy. Changing

the incentive structure through agreeing on a carbon price is important and

would make investment in cleaner energy sources more attractive. Aid can be

used to encourage and catalyse energy and infrastructure provision and further

technological innovation. Aid can neither substitute for international climate

agreement, nor pay the bill to ‘climate proof’ infrastructure and development.

The increasing frequency and intensity of climate-related crises will eventually

overwhelm development efforts unless climate change is brought under

control through effective mitigation. Experts highlight a huge difference

between development impacts (e.g. food production in Africa), if the global

temperature rise can be restricted to a maximum of two degrees, rather than,

say four degrees or more. ReCom research concludes that climate change is

unlikely to preclude growth and development prospects until about 2040. This

offers a window of opportunity. As the Stern Report argued, early action on

climate change is essential and will save money in the long run. If this

opportunity is not taken by the World community, the challenges for aid and

development become progressively more difficult.

To remain relevant and effective beyond 2015,

aid must learn to deal with

(i) the increased complexity on the supply side of aid, (ii) the new geography of

poverty, (iii) the hard core of fragile states (and the challenges of building state

capability), as well as (iv) the provision of global public goods including

environmental protection.

Successful completion of the poverty eradication and sustainable development

agenda by 2030 will require a step change in multilateral support for Global

Public Goods. Breakthroughs are needed on climate change agreements,

development financing (including international financial transparency and

taxation), international trade, and peacekeeping. With a more resilient

international architecture for sustainable (green) development, and with peace,

security and better protection against shocks, aid can deliver more – and to

scale. Delivery and impact in the social sectors in the past is a substantial

achievement – promoting employment in green and growing economies is an

even bigger prize to accomplish.

Summary | 3

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Overview: 15 ReCom findings for post-2015

Continue humanitarian assistance and aid to the social

sectors

Aid as emergency

humanitarian assistance

is widely understood and

accepted. Displacement of people through conflict or droughts, and floods and

famines are legitimate reasons for the international community to help. The

rationale for aid goes beyond the moral imperative to supporting development

processes so societies become more resilient to disaster, and less prone to

conflict.

Aid to the social sectors

(education, health, water and sanitation and social

protection) has produced many innovative and successful outcomes: there has

been significant progress towards universal primary education. For sub-

Saharan Africa, the region with the lowest primary school enrolment rates,

figures have improved from 57 to 78 per cent for boys and from 50 to 74 per

cent for girls, in just a 20 year period (1990‒2010). Aid has played a key role in

that process.

In 1980, only 17 per cent of children in the developing world were immunized

against diphtheria-tetanus-pertussis; by 2011, more than 80 per cent of children

were regularly immunized. This is a remarkable achievement. Maternal

mortality has also fallen significantly, from 543,000 in 1990 to 287,000 in 2010

– a 47 per cent improvement despite rising population.

Important strides have been made towards some of the MDG targets, but

overall the ‘agenda’ is far from complete. That task must continue and apply

lessons learnt for 2015-2030 – especially in transferring best practice between

countries, e.g. in social protection and in sharing advice on scaling from small

to large interventions.

Impact of aid in the social sectors: ReCom findings

A long term, annual inflow of aid equivalent to five per cent of GDP:

•

Augments schooling by 1.4 years per child

Boosts life expectancy at birth by four years

Reduces infant mortality by 20 per 1000 births

Contributes to growth and poverty reduction

Education, healthcare, access to safe drinking water and sanitation, and the

provision of social protection are fundamental to development. Aid to the

social sectors helps break poverty traps for the poorest and most vulnerable.

This builds inclusive societies and therefore social justice.

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Continue to innovate in service delivery for further impact

Universal primary

education

has advanced substantially – also in sub-Saharan

Africa. This reflects the contribution of the Global Partnership for Education,

increasing aid to education to one per cent of GDP, support for female

students, cash transfers and financial incentive programmes to reduce teacher

absenteeism. These are strategies that have worked. Enrolments are up, but

raising quality is urgent. Bilateral aid to education and health remains too

project focused, despite stated commitments to sector-wide approaches and

budget support. In 2011 (six years after the Paris Declaration) more than two-

thirds of aid to the social sectors was disbursed as projects.

health,

maternal and child mortality has almost been cut in half over the last

two decades – an exceptional success, supported by aid, in Sri Lanka, Niger,

Ghana and Mexico. Aid has funded large-scale programmes to contain and

reduce the prevalence of HIV/AIDS which thirty years ago looked likely to

devastate whole societies.

Impact of aid to health and education

ReCom research shows that aid to the education and health sectors reduces maternal

mortality and the female/male gap in youth literacy, in a comprehensive analysis of

141 countries over the period 1973-2010.

Aid-financed public expenditure on health and education has positive results.

There is strong evidence that aid has helped reduce maternal mortality,

improved access to contraception and reduced rates of new infection of

HIV/AIDS.

Yet, much remains to be done. In 2013, of 215 million women who lacked

access to modern contraceptives worldwide, more than 127 million were in

sub-Saharan Africa and South and Central Asia. Maternal mortality remains

high in the same areas. In sub-Saharan Africa almost 60 per cent of those

infected with sexually transmitted diseases are women and girls. HIV/AIDS,

tuberculosis and malaria still account for about five million deaths annually.

In addition to vaccines and clinical interventions, non-clinical interventions

help: securing stable financial resources for services; promotion of behavioural

change; and enhanced use of anti-retroviral drugs. These are expensive, and aid

remains essential until domestic revenues rise substantially.

Emphasize programme-support – and predictable funding

There have been considerable and effective innovations in school-feeding,

incentives to teachers, and deworming. Schools can act as a centre for

achieving wider social policies.

Institutions and the policy environment are important for effective work on

education and health. ReCom identifies the key factors for success as: strong

Overview: 15 ReCom findings for post-2015 | 5

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government support and donor leadership, with close collaboration across

governments, donors, and NGOs in project design; consistent and predictable

funding support even after success has been achieved; simple and flexible

technologies adapted to local conditions; programmatic approaches that

recognize and address the need to build health system infrastructure, especially

human resources; and household and community participation in the design,

execution, and monitoring of programme activities. Rigorous impact

monitoring and evaluation facilitates the assessment and, when needed, fine-

tuning of programme modalities.

Scale up aid for gender equality to achieve social justice and

more productive economies

Aid for

gender equality

is essential from a rights perspective, and is critical to

achieving women’s fullest contribution to economic, social and political life.

Ensuring girls’ secondary education; better reproductive health and access to

family planning; increased women’s control over and ownership of assets;

better employment prospects; support for women’s leadership and influence;

and the prevention of violence against women and girls – these are all key

areas. Challenges regarding mainstreaming and scale of funding persist. The

challenge of universal application rather than remaining at the project level

continues.

While gender equality is a matter of justice (a rights-based approach) it is also

instrumental in achieving better economic outcomes. Greater efficiency and

higher productivity result from investment in, and the full inclusion of, women

and girls. Women are now 40 per cent of the world’s workforce, and are much

more likely to be employed in low-productivity and labour-intensive jobs than

men.

Eliminate social and economic disadvantage and violence

against women and girls

Successful gender mainstreaming depends upon political commitment,

technical capacity to implement change, incentives, indicators, practices and

other mechanisms for mainstreaming, adequate financial resources and

accountability and monitoring systems. Using different measures, a pattern

emerges of rising donor commitment to gender empowerment until 2009, then

a tailing off.

Violence against women is pervasive. It is rarely the case that gender equality

and women’s empowerment are approached holistically through the entire

range of conflict prevention, conflict and post-conflict recovery issues. Of 300

ceasefire agreements, power-sharing arrangements or peace accords signed

since 1989, only 18 (six per cent) mention sexual violence. After conflict,

women’s rights are often ‘traded away’. More energetic application of UN

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Security Council Resolution 1325 is needed to fulfil the promise of that

landmark decision.

Gender quotas and reservations are now used in more than 100 countries and

have been found to increase women’s political representation at national and

local levels. The design of quotas is important, but they do not guarantee equal

representation.

Development agencies need to step up investment in

gender-disaggregated

data

– particularly on the informal economy, entrepreneurship, violence

against women and unpaid work. This will help donors and their national

partners to do a more effective job in costing the needed interventions for

gender equality, achieving the necessary scaling up, and thereby accelerating

impact. The OECD, with its gender marker, has provided a toll for systematic

monitoring since 1991.

Continue aid to support economic growth and graduation

from aid dependence

ReCom research not only shows that results have been achieved in the social

sectors but also that

aid helps achieve growth.

This is a cumulative process.

Many of the growth effects are not seen immediately. Sending a child to school

improves their well-being today, but most of the economic benefits occur in

the long run, when that child eventually enters the workforce.

ReCom research shows that an inflow of aid of the order of 10 per cent of

GDP spurs the per capita growth rate by more than one percentage point per

annum in the long run, and the long run has arrived.

Impact of aid

•

For 36 sub-Saharan African countries ReCom research shows an

overwhelmingly positive long-term impact of aid, over time.

ReCom analysis of the aggregate evidence shows a 7.3 per cent annual rate

of return on aid over 35 years – indicating that while not every aid

intervention works, in aggregate aid has had a significant impact.

Aid does this by building up physical and human capital, technology and well-

functioning institutions. These all require substantial investment. As the UN

High Level Panel notes, Official Development Assistance (ODA) provides 55

cents of every dollar of foreign capital that comes into low-income countries.

But when aid helps achieve growth, it also helps countries to ‘graduate’ out of

aid recipient status.

In the next 10 years perhaps 36 out of 70 (more than 50 per cent) of IDA

(International Development Association) recipients will graduate, on current

forecasts. They are becoming more attractive to private flows, including

foreign direct investment.

Overview: 15 ReCom findings for post-2015 | 7

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Make growth socially inclusive by raising productivity to

deliver more and better employment.

Inequality is socially destabilizing. It also makes it harder to reduce poverty

through growth, as the non-poor reap more of the benefit of growth.

ReCom highlights

the need for remunerative employment,

especially of

young people – the surest route out of poverty. This includes more wage-

employment – especially in manufacturing and high-value services – as well as

better self-employment in smallholder agriculture and informal enterprises

(urbanization without employment is no answer). This implies greater attention

to non-traditional exports, industrial clusters, and strengthening firm

capabilities. Underlying this is a process of

structural transformation

that

helps people move out of less productive and into more productive sectors

and occupations.

ReCom finds that donors should now give higher priority to helping countries

achieve structural transformations that create ‘jobs’, particular to reduce youth

unemployment. ReCom analysis highlights the many ways donors can work

with countries to achieve this. Donors can help countries with national

strategies that improve skills and human capital formation, allowing them to

diversify into new sectors, as well as support macro-economic policies that

facilitate high and stable growth.

Donors can help new and promising sectors, building on the evidence around

the ‘new industrial policy’ that helps countries compete in the global economy

for manufacturing and high-value services. Infrastructure investment is vital,

especially in energy, and particularly in Africa. Finally, donors can support

enterprises and social businesses – notably those that employ the poor – and

public employment schemes that stabilize incomes in the face of poverty and

shocks.

Yet, aid has not paid much attention to employment; what has happened

remains small-scale and patchy, according to ReCom’s findings. Aid to one of

the most important sectors for livelihoods –

agriculture

– has declined over

the last two decades, and while it shows a modest recovery, donors are not

paying enough attention to improving agricultural productivity, and helping

countries move up the value chain into agro-processing. Donor support to

infrastructure remains too meagre. Overall, donors are not helping enough for

countries to achieve

scale

in employment generation. Small donor-funded

projects might create a few jobs, but millions of jobs are needed for inclusive

growth. Otherwise, the quantum leap in economic opportunities and a

profound economic transformation to end extreme poverty and improve

livelihoods’ called for by the UN High Level Panel will not occur. This should

be a vital part of aid’s support to the post-2015 development agenda.

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Support structural transformation and social safety nets

until domestic revenues can take over

Growth lifts revenue and potentially allows such spending to be financed from

domestic revenue – although LICs will continue to need external support. One

major public policy innovation, primarily in Latin and Central America has

been

cash transfer programmes.

These have largely been financed from

taxation.

Domestic resource mobilization,

through taxation and improved natural

resource management, could finance human capital development and social

protection also in some poorer African countries. This is particularly so where

countries have newly discovered minerals – especially oil and gas.

The tension between domestic resource mobilization and the resource curse

suggests that even countries which are able to generate considerable resources

through exports of minerals require assistance in governance issues, public

sector management and combating corruption. Increasing tax revenue and

linking the windfall of oil, gas and mineral revenue to the rest of the economy

are key opportunities. There are considerable gains to be made from regulatory

reform.

Tax policy and public administration reform have been ReCom emphases –

including improved tax policy and design, creating more effective tax

administrations and encouraging more productive state-society engagement

around taxation. Countries that have found their way out of the ‘low-tax trap’

include Bangladesh, Cambodia, Ghana, Kenya, Nepal, Rwanda, Sierra Leone,

Uganda, and Vietnam. Donor support to reform and build better tax

institutions – and better mechanisms of public-sector financial management

overall – have been an important part of these successes.

Build institutional capacity to help governments ‘deliver like

a state’ – not just ‘look like a state’

A ‘capability trap’ characterizes many states with stagnant or declining capacity,

especially among LDCs.

ReCom’s work on

governance and fragility

disaggregates governance into

key components and provides many examples of innovative aid initiatives to

help achieve the Peace- and State-building Goals – legitimate politics, security,

justice, economic foundations and revenues and services.

However, there remains a residue of ‘hard policy environments’ – the result of

fragility and armed conflict. Aid has to be aligned with peacekeeping and post-

conflict strategies. Physical security has to be secured for development to

function – state fragility is where economic development, humanitarian

concerns, and security intersect. Aid’s role here can be significant, noting that

the gender dimensions of post-conflict reconstruction need stronger emphasis.

Overview: 15 ReCom findings for post-2015 | 9

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Fixing poorly governed societies and fragile situations is not a simple task for

which a universal manual can be written. In many situations, the challenge is

no less than a long-term commitment to building state capability. Long-term

institution building is the way to good governance and overcoming fragility.

‘Looking like a state’ – without effective delivery – is a proven avenue to donor

funding – and longer-term failure. Short-term programmes aimed at

accelerated modernization of the administrative capacity of states are not

effective and waste money.

What can be done? Each least developed, fragile country is different, but there

are some basic principles. These are encapsulated in the

Problem-driven

Iterative adaptation (PDIA)

approach, developed under ReCom. PDIA has

four principles: it is problem driven; it authorizes positive deviation into the

design space; it adapts using experiential learning; and it scales up through

diffusion.

PDIA provides an analytical framework and explanations for the capability

trap – stagnant or falling state performance in many countries, and also for

failures due to ‘premature load bearing’. ReCom analysis of Afghanistan and

South Sudan show how dependent these states are on external support and

expertise.

10 Support legitimate politics to overcome fragility and bad

governance

In fragile states, economic development, humanitarian concerns and security

intersect. ‘Whole of government’ approaches, which use the full range of

political, security and development strategies, have been commended for

application in countries such as Somalia, Afghanistan and the Democratic

Republic of Congo.

The ReCom project stresses and assesses issues such as

electoral assistance,

party political support and strengthening legislatures.

It also emphasizes

wider democratic involvement, human rights, human security, and the rule of

law.

For electoral assistance, the entire democratic cycle (not just one set of

elections) must be supported. Basket funds for elections have proven

successful, and are scalable and transferrable. Parliamentary support, including

development of parliamentary oversight of the budget, remains important for

the functioning of democracies and also for curbing official corruption.

In democracy assistance, ReCom has stressed that better harmonization of

donor initiatives is essential. This message is also borne out by the work on

democratic trajectories in Africa, which shows how aid contributed to these

transitions in the 1990s.

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Security sector reform remains a core challenge. Successful police reforms have

been built around a political settlement, shared values of governance,

administrative capacity, and a vibrant civil society.

Among the positive examples of work which has been transferred and scaled

up is that of judicial facilitators in Nicaragua – a volunteer-based programme

started by the Organization of American States. This model has already been

applied in other countries in the region (e.g. Argentina, Ecuador, Guatemala,

Panama and Paraguay).

11 Address climate change now – otherwise it will overwhelm

development progress

The increasing frequency and intensity of climate-related crises threatens to

overwhelm development efforts unless climate change is brought under

control. Experts highlight a huge difference between development impacts

(e.g. on food production in Africa) if the global temperature rise can be

restricted to a maximum of two degrees, rather than, say four degrees or more.

ReCom analysis concludes that climate change is unlikely to preclude growth

and development prospects until about 2040. While this provides a window of

opportunity, it must now be taken into account for long-term investments such

as infrastructure and energy.

As the Stern Report argued, early action on climate change is essential and will

save money in the long run. If this chance is not taken, the work for aid in

helping countries meet their development challenges will become progressively

more difficult, and more aid will have to be allocated to disaster relief. If

climate change becomes acute, then the progress of LICs to middle-income

status will be halted or reversed, and they will slide back into aid-dependence.

12 Raise the funding for climate change initiatives – use public

money to leverage in more private finance

ReCom finds that the main institutional initiatives in climate finance (Reducing

Emissions from Deforestation and Forest Degradation – REDD; the Clean

Development Mechanism – CDM, the Global Environment Facility – GEF

and the Green Climate Fund – GCF) are basically sound in conception, but are

neither supported by adequate policy frameworks nor sufficiently resourced to

make a major impact.

There is now more environmental assistance, increasingly from bilateral

sources, and funding has recently been shifting towards supra-national issues

such as climate change. A complex institutional framework in climate finance

has evolved rapidly alongside the existing aid architecture.

The trend towards bilateral aid is coupled with a decrease in the size of

environmental projects. In many ways effort in this area is being dissipated by

Overview: 15 ReCom findings for post-2015 | 11

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the replication of long-standing weaknesses in aid: too many projects, too small

a project size, and a lack of coordination between actors and initiatives. These

dilute impact.

ReCom points to the need for

sharpening the profile of the environmental

objective

in overall aid flows; reform of existing institutions in order to better

address environmental objectives; and the creation of smart approaches at

programme, project and sectoral level. Aid should continue to seek to help to

catalyse the transformation needed to confront and mitigate environmental

problems.

ReCom makes a case for deeper engagement with middle-income countries

(MICs) without in any way diluting the traditional attention paid to LDCs and

LICs. This is justified by: the sheer number of poor in MICs; the potential role

of MICs in combating global environmental problems; and their needs in

adapting to climate change.

Aid donors and institutions need to play a greater role in the provision of and

funding for global and regional public goods. ReCom singles out the neglect of

agriculture in particular and finds that there are overlapping mandates and

ineffectiveness in the international organizations tasked with support for

agriculture. ReCom stresses in particular the need for more effective

international action.

Aid in support of technology development and innovation is needed. But aid

(and climate change finance) cannot act alone. They must support mechanisms

to mobilize, catalyse and leverage private and domestic public investment.

Given the high investment costs of private investment in this area, aid policy

needs to think creatively about ways to encourage more private investment.

13 Poor countries develop by using more energy – make this

sustainable

Currently, countries tend to use cheap but environmentally ‘dirty’ energy.

Changing the incentive structure through agreeing a carbon price – and

providing adequate financial and technical support – is vital and would make

investment in cleaner energy more viable. Aid should be used to encourage and

catalyse energy and infrastructure provision.

Aid can neither substitute for an agreed, robust and effective international

climate agreement, nor pay the total bill to ‘climate proof’ development (e.g.

infrastructure) in a ‘climate-constrained’ world. Taking full account of the best

quality data and analysis is absolutely essential to inform and guide

investments. This is especially so in agriculture, which still provides the main

livelihood for much of the world’s poor.

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14 Strengthen national capacity for data collection and analysis

to help policy – and make aid more effective

Development strategy must allocate domestic and external resources among

many competing ends. Decisions on policy and investments will be better

informed by strengthening national capacity for analysis within government as

well as national research institutions. Through its technical assistance

component, aid has helped to build more capacity in recipient countries over

the last 30 years.

Initially such aid support was in the area of macro-economic policy. This must

be sustained while also building capacity in the areas of structural

transformation, inclusion and climate change, in particular. To bring national

analytical capability up to the best international standards, effective and

sustained linkages need to be built with the global research community.

Analysis to be policy useful needs good-quality and timely data. This applies to

all policy areas but especially to the areas of poverty and employment

generation.

Evidence-based policy requires better-disaggregated data,

especially to address gender inequality, to provide evidence for action on

poverty and social inequalities, and to support the creation of better livelihoods

(e.g. in understanding the informal sector and its potential).

ReCom finds that aid has improved statistical capacities in Africa, but that far

more needs to be done. Efforts have so far been sporadic, with a multiplicity

of small projects, rather than larger efforts to create a step change in data

quality and availability.

More data will allow aid donors and governments to better understand the

impact of aid inflows and policy reform and will reduce the reliance of the aid

debate on often patchy data and, in worst cases, repetition of ‘anecdotes’ that

bear little relation to country realities.

15 Go to scale in impact, and provide global public goods –

especially peace-keeping

Better aid coordination in practice, and not just in rhetoric, is needed to

generate efficiency gains on the supply-side of aid and will reduce the

transactions costs for donors and recipients. ReCom finds that by doing so,

significant resources can reallocated to development itself. New donors

(national, business and philanthropic) will need to be drawn into a closer

working relationship with traditional donors.

Going to

scale in impact

must be a core objective if aid is to effectively

support the post-2015 development agenda. For donor countries, the

composition of their ODA is a political choice. Beyond 2015, continuing with

aid to the social sectors is a safe choice and certainly valuable – maintaining the

momentum in the social sectors remains a priority. More ambitious and more

Overview: 15 ReCom findings for post-2015 | 13

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risk-tolerant donors will embrace the structural change agenda as well, and

marry this to environmental sustainability.

Focusing more aid on structural transformation will assist with growth and

inclusion. If the high-growth African countries can sustain their success, and if

growth in the lagging economies among the LICs is raised, then more fiscal

space is created to finance social protection (e.g. by emulating Latin American

countries in paying for cash transfer programmes from taxation). Aid for

gender equality needs to go to scale for reasons of justice as well as to help

deliver more growth by using the productive resources of women more

efficiently.

While there will be a hard core of fragile states and situations in LDCs, which

will continue to require external support, strategies have been developed for

assisting post-conflict countries. Achieving growth in such countries makes the

solution of governance issues easier to address. An expanding economy makes

redistributive policies more viable, allowing destabilizing inequalities to be

contained and reduced.

While aid does foster growth in the long term, climate change is a potential

‘game changer’ – it could create a situation where development stagnates or

faces challenges of such a magnitude that governments and donors are

overwhelmed by the size of the problem. This would push most aid away from

development and into disaster relief.

If an era of effective multilateralism can produce significant international

agreements on global public goods (e.g. on trade and climate change), aid will

operate in a context that enhances its effectiveness. Even if this is not the case,

climate-proofing aid, investing in cleaner energy and climate finance projects

will still be beneficial.

Successful completion of a poverty eradication and sustainable development

agenda by 2030 will require a

step change in multilateral support for Global

Public Goods.

Breakthroughs are needed on climate change agreements,

development financing, international financial transparency and taxation, and

international trade and peacekeeping. With a more resilient international

architecture for sustainable development, and with peace, security and better

protection against shocks, aid can then deliver more – to scale. Human

development through aid’s support to the social sectors is already a substantial

achievement. Structural transformation for inclusive growth and environmental

sustainability are even bigger prizes to accomplish.

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