How can foreign aid donors help, not hinder, transparent budgeting?

This post was prepared by Porter McConnell of OxfamAmerica.

Development aid, used in smart ways, can save lives and help people get themselves out of poverty.  But sixty years of foreign aid have shown that donors cannot fix the problems of poor people by themselves.  Poor people themselves are demanding accountability and performance from their governments, and our aid is most effective when it invests in strengthening this relationship.

Oxfam recently released a paper calling for specific reforms that emphasize recipient ownership—making US foreign aid support the efforts of governments and citizens to lead their own development.  In particular, reforms should follow these three principles:

Information:  Let countries know what donors are doing

•             Be transparent, publishing what the US gives overall every year in a form that recipient governments can use and their citizens (and US taxpayers) can access and understand.

•             Be predictable, providing countries with regular and timely information on three-to-five-year forward expenditure and implementation plans with at least indicative resource allocations.

Capacity:  Help countries lead

•             Better align technical assistance with what governments and citizens need, including by untying aid.

•             Support local efforts to improve domestic accountability, including by using public financial management systems when appropriate and supporting efforts by citizen groups, parliaments, and auditing agencies.

Control:  Let countries lead

•             Limit earmarks and Presidential initiatives that are inconsistent with country priorities.

•             Give recipient governments and citizens incentives to manage their own development effectively and hold each other accountable, including direct budget support in appropriate contexts.

As the report is careful to point out, every country is different, and donors should view the above as a continuum.  Where governments are corrupt or non-responsive, donors can provide information and work primarily with civil society groups.  However, where governments have a record of transparency and providing services to their citizens, donors can and should let countries control the development agenda.

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Read a related IBP paper: Improving Budget Transparency and Accountability in Aid Dependent Countries: How Can Donors Help?

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