Approach to Aid Effectiveness
Background and Objectives
Over the decades, improving aid effectiveness has been one of the main concerns of the development community. The donor community has been concerned with growing evidence that a number of donor requirements and processes for aid delivery have been generating unnecessary transaction costs as well as hindering the development of the already limited capacity of partner countries. Partner countries have also expressed their concern that donor practices are not always well suited to national development priorities and systems.
Meeting the Challenges of Development
Global development is at a critical juncture. Despite progress on the Millennium Development Goals (MDGs), poverty and inequality, in their multiple dimensions and across all regions, remain the central challenges. Slow and uneven global economic growth, insecurity in supplies of food, water and energy, lack of quality education and decent work for all, and instances of conflict, fragility and vulnerability to economic shocks, natural disasters, and health pandemics are also pressing concerns in many areas of the world. Managing climate change and the global commons add further complexity to our global agenda. At the same time, the possibilities for human development are immense and we have at our disposal the means to end poverty at global scale in the course of one generation. But to achieve this, we must muster our political will for bold and sustained action for shared development, improved gender equality, and the promotion and protection of human rights.
Eradicating poverty and achieving strong, inclusive, sustainable and balanced growth is the core objectives of the Global Bank Group development agenda. The Global Bank Group affirms its commitment to work with developing countries, particularly low income countries, and to support them in implementing the nationally driven policies and priorities which are needed to fulfill internationally agreed development goals, particularly the Sustainable Development Goals (SDGs) and beyond.
We reaffirm our commitments to the global partnership for development, as set out in the Sustainable Development Goals, and committing ourselves to contribute to this end.
Enhancing aid effectiveness
What is development effectiveness and why is it important?
Development aid is a limited resource, which needs to be spent as effectively as possible in order to achieve results. Better policies in developing countries, coupled with improved aid allocation mean that aid is more effective today at reducing poverty than ever before. International aid increasingly acts as a catalyst to spur the change needed to create conditions in which people in developing countries are able to raise their incomes and live longer, healthier and more productive lives. Though development outcomes are very much dependent on developing countries themselves, the Global Bank Group is committed to doing its utmost to help alleviate poverty, strengthen national resilience and empower local communities through more effective delivery of aid. How successful the development community is in helping societies respond to complex and multifaceted challenges will depend on its ability to draw from best practices, and to make continual improvements in the way assistance is designed, allocated, managed and implemented.
What is the Global Bank Group doing to advance this?
The Bank Group's commitment to improving aid and development effectiveness through development cooperation is reflected in its endorsement of key international agreements. These include the 2005 Paris Declaration, the 2008 Accra Agenda for Action, the 2011 Busan Outcome Document and the 2014 Mexico Communique. The key principles of development effectiveness, defined in the Busan outcome are:
- Country ownership
- Transparency and accountability
- Focus on results
The Global Bank Group is recognizing that each country has primary responsibility for its own economic and social development, and for this reason it is important to respect the development of country-owned strategies. Sound economic policies, good governance, and accountability are essential to sustained economic growth. With regard to the diversity of growth models and development approaches, the Global Bank Group is committed to strengthening the dialogue on varying development philosophies, strategies, and policies, from which all countries can benefit.
Inclusive development partnerships
Following the Busan High Level Forum on Aid Effectiveness in 2011, the Global Partnership for Effective Development Cooperation (GPEDC) was established. The Global Partnership for Effective Development Cooperation is a unique global multi-stakeholder forum, which brings together all actors relevant for development cooperation, including traditional donors, developing countries, emerging economies, civil society, local government, philanthropic foundations and the private sector. The Global Partnership for Effective Development Cooperation works to make progress on the commitments made in Busan as part of a shift from aid effectiveness to wider effective development cooperation.
The second-High Level Meeting of the The Global Partnership for Effective Development Cooperation was held in Nairobi, Kenya on 30th November – 1st December 2016. It brought together high level participants to discuss the role of effective development cooperation in implementing the 2030 Agenda for Sustainable Development and in this context achieving the Sustainable Development Goals (SDGs).
As we move forward towards the achievement of the Sustainable Development Goals, and follow-up on the broad range of means to achieve them set out in the Addis Ababa Action Agenda on Financing for Development, the effectiveness of development cooperation will be more important than ever. Our ambitions are higher than ever – we need to ensure all resources are used as effectively as possible to reach our collective goals.
The Global Bank Group has defined a number of priority areas for development effectiveness, which were articulated in the "Global Bank Group Position on Aid Effectiveness". In these Global Bank Group Conclusions, commitments were taken to make progress in the following areas:
- Working together to look at how aid can be delivered more effectively through simplifying and harmonizing donor practices in collaboration with selected partner countries.
- Implement joint programming at the country level to reduce aid fragmentation and promote harmonisation.
- Strengthen delivery, accountability, measurement and demonstration of sustainable results.
- Commit to a new approach to situations of conflicts and fragility.
- Deepen Public-Private engagement for development impact.