Development aid is growing, but we still can’t track how most is spent

Children displaced by recent fighting stand outside a tented school run by UNICEF, in the town of Mingkaman, South Sudan where humanitarian assistance is being provided. (Credit: UNICEF/Holt)

The amount of money spent by wealthy countries reached an all-time high in 2015. But an aid transparency group says most of these countries are not living up to their commitments to publish their data to the internationally accepted standard. With only 10 donors meeting their commitments, some 75 percent of the more than $130 billion in aid spent in 2015 is not transparent. Donors are getting better, but there is a long way to go.

“It is encouraging that there has been a marked improvement in aid transparency – but more needs to be done in order to ensure that development is as effective as possible,” said Helen Clark, head of the U.N. Development program (UNDP).

A total of 46 aid agencies were evaluated in the 2016 Aid Transparency Index and ranked in order of adherence to meeting the International Aid Transparency Initiative (IATI) standards, by Publish What You Fund. Leading the list is UNDP, the U.S. Millennium Challenge Corporation and UNICEF. At the bottom are the United Arab Emirates, China, and the French Ministry of the Economy, Finances and Industry (MINEFI).

Rankings aside, the real issue is that most donors did not meet their commitment to utilize the IATI standard by the end of 2015, as outlined in the Busan Partnership Agreement in 2011. With all the talk about big data and better data, it is hard to usher in the hyped “data revolution” if everyone can’t publish their basic information in a way that is easily accessible.

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And it dulls the fact that development assistance is in fact increasing. New data from Development Assistance Committee of the Organization for Economic Development and Cooperation shows that development assistance rose by 6.9 percent in real terms. The refugee crisis drove the increase, but setting aside in-donor refugee costs, the total still went up by close to 2 percent. It is good news because it means that the refugee crisis is not leading to the reallocation of aid dollars.

“Governments must ensure that development aid keeps rising,” said OECD Secretary-General Angel Gurría, in a statement. “They also need to develop long-term options for meeting future refugee costs and the integration of refugees in our societies, while ensuring at the same time that [official development assistance]reaches those countries and people that need it the most.”

The United States is the top spender by a significant margin when it comes to total dollars, but performs poorly relative to gross national income. Only the U.K., Netherlands, Denmark, Luxembourg, Norway and Sweden achieve the U.N. target of spending at least 0.7 percent of gross national income on development assistance.

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But the numbers used to measure development assistance are under continued criticism. In March, the U.K. shadow minister for international development Diane Abbott told Humanosphere that she is concerned by the allowance of military spending to be included in the assistance figures. The concern is that the definition set by the Development Assistance Committee could incentivize countries to take creative accounting steps to boost their numbers, rendering spending targets opaque and meaningless.

And with little information about how or where money is spent, it makes effective humanitarian action difficult. Publish What You Fund points to the West Africa Ebola crisis as an example where $1.9 billion of money pledged to the three affected countries has yet to be disbursed. Without any information about the intent for the money and where it is coming from, there is no way the governments can know when it will come – if ever.

When countries rely on foreign aid, they make decisions based on promises by donor countries. The inability to know details about pledged aid can lead to significant budgetary problems. Which is to say, that more money is not necessarily helpful it if is hidden away.

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About Author

Tom Murphy

Tom Murphy is a New Hampshire-based reporter for Humanosphere. Before joining Humanosphere, Tom founded and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]humanosphere.org.