Changing World of Aid

  • Keywords: Official Development Assistance, aid effectiveness, changing world of aid, results-based approach, accountability, project process, new actors, new development models.

The world of Development Assistance has experienced profound changes over the past 20 years. New actors are appearing on the ground and are becoming involved in the international debate: emerging donors, philanthropic foundations, corporate foundations, dedicated investment funds, regional and local authorities, NGOs, while Official Development Assistance in the traditional sense (public donors from OECD countries) has stagnated at around USD 130bn a year and must continually affirm its legitimacy (aid effectiveness, evaluation of results and impacts) and renew its practices (new instruments, new partnerships, new areas of operation). In addition, the Sustainable Development Goals (SDGs) for 2030 (which will be adopted in 2015 to follow on from the Millennium Development Goals, MDGs), and the Development Assistance Committee (DAC) reform of ODA reporting adopted in December 2014 (and which will come into force in 2018 following a transition period from 2015-2018) are likely to change the balance between development partners and speed up some of the ongoing changes.

In order to gain a better understanding of the resulting developments and issues for AFD, the “Changing World of Aid” research program analyzes the restructuring of development assistance via two main perspectives:
 

  • New actors/new models/architecture of aid:
    Studies on new development assistance actors (emerging donors, philanthropic foundations, NGOs, private companies and their foundations) in order to understand the rationale for their intervention, and feed into reflection on the opportunity of developing partnerships with them, as well as the new development models they are experimenting with (social business, bottom of the pyramid, crowdfunding…), which are clearly of interest for AFD. The architecture of Official Development Assistance, which is traditionally divided between multilateral aid and bilateral aid, is also changing with the increasing importance of earmarked funds (“multi-bi” aid), which questions the geographic allocation of aid at global level.

 

  • Aid implementation and effectiveness:
    The issue of aid effectiveness, after having dominated the debate for a long time at the macroeconomic level (does aid have an impact on growth?), is central to questions over aid implementation. It is today reflected in a strengthening of the results-based aid approach in the implementation of development operations (it involves making aid and financing for development conditional on the achievement of results based on previously defined indicators). This approach redirects strategies and produces new financing instruments. It does, however, pose a number of challenges for aid actors: problem of results measurement, risk of concentration of resources, search for short-term impacts to the detriment of long-term support… They need to be studied in order to provide an effective response to the legitimate demand for accountability from taxpayers and civil society, while maintaining the quality of operations and the support for change over the long term. In 2016, the issue of indicators will also be the top priority for the implementation of the mechanism for monitoring the SDGs. At the same time, almost 50% of aid continues to be delivered in the form of project support. Beyond the monitoring indicators that are implemented, its effectiveness depends on the ability to stabilize, over time, a network of actors and technical objects, which will need to adjust to the uncertainty and hazards of the course of time. The analysis of “project processes” is another way of gaining a better understanding of the failure or success of certain projects, and ultimately of improving the effectiveness of development operations.

This program consequently studies development assistance actors (philanthropic foundations, corporate foundations, NGOs), the new development models (social business, social entrepreneurship), development projects from the perspective of processes and the rationalist results-based approach. It uses analytical grids from sociology, social anthropology, economics and management science.
 

Last update in December 2015

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