tag:blogger.com,1999:blog-6719829.post2723330482730713076..comments2024-03-27T12:04:05.897+00:00Comments on Rick On the Road: An aid bubble? - Interpreting aid trendsRick Davieshttp://www.blogger.com/profile/07028422984421301184noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-6719829.post-52788319186860008382008-12-20T05:56:00.000+00:002008-12-20T05:56:00.000+00:00DFID has recently released a LIST OF POTENTIAL EVA...DFID has recently released a LIST OF POTENTIAL EVALUATION TOPICS FOR <BR/>2009-2012. Amongst these I was pleased to see the following: <BR/><BR><BR/><B>Evaluation of the effects of a large rise in DFID’s programme budget – and concurrent decrease in administrative budget – on the delivery of the aid programme. Timing: flexible. </B><BR><BR/>You can find out more here:<BR/><A HREF="http://mande.co.uk/2008/topic-bibliographies/bilateral-agencies/new-dfid-policy-on-evaluation/" REL="nofollow">http://mande.co.uk/2008/topic-bibliographies/bilateral-agencies/new-dfid-policy-on-evaluation/</A>Rick Davieshttps://www.blogger.com/profile/07028422984421301184noreply@blogger.comtag:blogger.com,1999:blog-6719829.post-624607328893426612008-07-27T04:35:00.000+00:002008-07-27T04:35:00.000+00:00Hi BobI think you are still mis-reading my intenti...Hi Bob<BR/>I think you are still mis-reading my intentions. The blog raises what I think are two potentially important evaluation questions: about potential usefulness of an ex-ante evaluation of proposed expenditure patterns, and the need for a “whole of aid chain” costing of aid. I agree that there is not necessarily a positive association between scale of administration costs and aid effectiveness. That is why the survey instrument gives a number of options, including the first one that says DFID is finding more cost-effective ways of giving aid. In fact it is this first option that I find myself begrudging supporting later on down the blog, past the survey form (did you read that part?). My scepticism in this blog is not about aid volumes per se (difficult as it can be to spend existing aid funds effectively) but about the wisdom of cutting administrative costs while scaling up aid volumes. And you seem to have a tinge of scepticism yourself, when you note that the politics of aid are not very closely related to its economics. I suspect that the same also applies in the UK, but more in favour of increasing aid rather than decreasing it. <BR/><BR/>Despite the slightly tongue-in-cheek nature of the survey form, I think I am on balance a “professional optimist” I think if you look through my past blogs the majority of them try to offer constructive ways forward.<BR/><BR/>By the way, I should correct a mistake I made yesterday, when responding on the issue of spend on technical assistance (TA). Because costing of TA is not included in the admin cost component in the graph, reductions in TA would not (contra what I had suggested) suggest more support for option 2 on the survey.Rick Davieshttps://www.blogger.com/profile/07028422984421301184noreply@blogger.comtag:blogger.com,1999:blog-6719829.post-30220891092169641032008-07-26T15:43:00.000+00:002008-07-26T15:43:00.000+00:00RickIt is from clear that more generous aid with f...Rick<BR/>It is from clear that more generous aid with fewer administrative strings attached would be less effective. Nor are ready made excuses to cut aid in short supply irrespective of aid volumes. For example, aid pessimists are very much in vogue in the United States despite very low shares of national incomes allocated to development assistance assistance. The politics of aid are not closely related to its economics. Thus, the hidden premise underlying all of your questions (i.e. positive aid volume trends should be a matter of deep public concern) while intuitively appealing is in fact dubious... <BR/>BobAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6719829.post-55346830779483856552008-07-26T14:37:00.000+00:002008-07-26T14:37:00.000+00:00Hi Bob. I am not saying there is an aid bubble now...Hi Bob. I am not saying there is an aid bubble now. Rather that if the divergent trend in the graph continues, as projected, one possible consequence will be a (DFID)aid bubble that will burst. That possibility would be independent of how big UK aid is as % of global aid flows.<BR/><BR/>The point about large amounts of hidden administrative costs (in the form of TA)is more interesting, I think. While TA recipient views are important, equally important is how much that TA contributes to making other forms of aid affective e.g. grants. I think much of the evidence from the past would suggest the answer "not very much" In which case option 2 in the online survey may be truer than seems at first sight. And the intentions of the Paris Declaration to cut these costs might be sensibleRick Davieshttps://www.blogger.com/profile/07028422984421301184noreply@blogger.comtag:blogger.com,1999:blog-6719829.post-86725882170591710012008-07-26T14:19:00.000+00:002008-07-26T14:19:00.000+00:00Rick: Are you focusing on the right aid effectiven...Rick: Are you focusing on the right aid effectiveness issues? Yes, the volume of aid given by DFID will continue to increase and the recorded cost of administering UK aid is expected to decline. But there is no aid bubble. Globally, recent aid increases are largely explained by debt write offs to Iraq, Nigeria etc and total aid flows remain well below the share of national incomes achieved in 1990. As for British aid (£4.5 billion) it is still only 0.37% of the 0.7% target globally endorsed in 1970. Large administrative costs are hidden in UK aid numbers as they are in all official aid statistics. While DFID's official administration costs (about £167 million) may not be excessive they are the top of a very large iceberg called technical assistance. For the aid system as a whole, technical assistance accounts for 15 % of aid. It is not highly regarded by recipient countries and its delivery distorts local pay scales: a typical consultant earns £500 a day - more than government officials earn in a month. Under the Paris declaration donors have undertaken to cut aid transaction costs. Delivering on this promise as well as on other Paris Declaration commitments (while achieving the 0.7% of national income share) remains critical to the credility and fairness of all development assistance, including UK aid.<BR/>BobAnonymousnoreply@blogger.com