Quality of aid is as important as quantity. International policies must ensure that (a) the primary objective of aid is to reduce poverty, and (b) that aid is spent effectively.
Aid must be predictable and focused on the most vulnerable children. When aid is spent inefficiently, the consequences are seriously detrimental to developing countries. For example:
- Unpredictable aid loses about 20 per cent of its value
- Reporting to poorly coordinated donors can take up almost half the working time of public sector staff in developing countries
- A significant amount of aid given to developing countries for health is spent outside of government institutions and therefore fails to build capacity of the countries’ own health systems.
In 2005, twenty-five international organisations, along with 90 countries, adopted the Paris Declaration on Aid Effectiveness. This committed participants to ensuring aid is effective with a set of actions and indicators.
Three years later, the Accra Agenda for Action built on these commitments by calling for aid predictability, an end to conditions that suit the donor agenda, and untying aid to allow developing countries the freedom to choose where to buy their goods and services from.
A new international framework for ensuring the maximum effectiveness of aid will be agreed at an international conference to be held in Korea in December 2011.