What is aid effectiveness?

Aid effectiveness is about ensuring maximum impact of development aid to improve lives, cut poverty and help achieve the Millennium Development Goals.

At the beginning of the 21st century it became clear that aid was not delivering the expected results. Inadequate methods and differences in donor approaches made aid less effective. Action was needed to boost impact.

High Level Forums

In February 2003 representatives of donor and developing countries met in Rome for the first High Level Forum on Harmonisation. In Rome, donors committed to work with developing countries to better coordinate and streamline their activities at the country level.

In March 2005, over one hundred ministers, heads of agencies and other senior officials met in Paris at the second High Level Forum, and committed their countries and organisations to the Paris Declaration Commitments by signing the Paris Declaration on Aid Effectiveness.

Themes covered in the Paris declaration include:

• Ownership: developing countries set their own priorities for development, strengthen their institutions and lead in coordinating aid.
• Alignment:  donors line up their aid behind developing country priorities and make better use of a country’s plans, policies and systems.
• Harmonisation: donors coordinate to avoid duplication, simplify procedures and agree a better division of labour with partner countries.
• Managing for results: developing countries and donors keep their focus on producing - and measuring - results.
• Mutual accountability: donors and developing countries are held accountable for the results they achieve to each other, and to their parliaments and public.

In September 2008, development partners came together for the Third High Level Forum in Accra, Ghana, to boost efforts to achieve the Paris targets. At Accra, donors and partner country governments recognised that strengthening national ownership of development required a wider dialogue that fully includes parliaments, local authorities and civil society organisations as well as south-south cooperation and aid provided by middle-income countries. The Accra Agenda for Action gave new impetus to the Paris principles. Agreement was reached on:

• Predictability: donors provide, when possible, 3- to -5 year estimates of their planned aid.
• Country systems: partner countries strengthen their capacities; developing country systems are used to deliver aid as the first option.
• Conditionality: donors switch from prescriptive conditions on how and when aid money is spent to conditions based on the developing country’s own objectives.
• Untying: donors relax restrictions that prevent developing countries from buying the goods and services they need wherever they can get the best quality at the lowest price.

The Fourth High Level Forum

At Busan global development leaders will review progress in improving the impact and value for money of development aid and make new commitments to further ensure that aid helps reduce poverty and supports progress in meeting the Millennium Development Goals.