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Aid flows should be completely transparent – not just to the donor and recipient, but also to other stakeholders in both countries. Greater transparency enables developing countries to plan their use of resources more effectively. It helps donors to coordinate with each other. It enables tax payers in donor countries to see how their funds are being used. It also enables citizens in developing countries to understand the aid process and hold their governments to account for how aid is used.
Under the Paris Declaration, improving aid transparency is identified as one of the strategies for strengthening mutual accountability. Donors agreed to provide timely, transparent and comprehensive information on aid flows to enable partner authorities to present comprehensive budget reports to their legislatures and citizens (para. 49).
The AAA contains more ambitious goals. Donors agree to disclose regular, detailed and timely information on volume, allocation and, when available, results of development expenditure, to enable developing countries to manage their finances more effectively (para. 24a). They agree to disclose the reasons for any decision not to use country systems (para. 15b), and to making public all conditions linked to disbursements (para. 25b).
There is no specific monitoring around aid transparency, but the Paris Declaration Phase I evaluation noted that both developing countries and donors face continuing, serious difficulties in securing and providing timely, transparent and comprehensive information on aid flows. Studies have noted that both the supply of and the demand for information remains weak. However, 16 donors have now signed up to the International Aid Transparency Initiative, which is developing common standards and procedures for sharing information.
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