Aid coordination and aid effectiveness

Both donors and aid recipients are spending considerable resources on aid coordination activities. The trend seems to be towards an increase in these levels, yet relatively little is known about the outcomes and impact of these efforts. In particular, there does not seem to be much of a strategy in place for how to improve the effectiveness of the aid coordination resources them-selves. As a step towards understanding where the debate on aid coordination is today, the Planning and Evaluation Unit in the Ministry of Foreign Affairs commissioned this study.

Study provides an update on the aid coordination debate. It is primarily a desk study, but supplemented by interviews of resource persons and the use of relevant case studies. Particular attention is to paid to recipient experiences and viewpoints where these could be identified.

Inputs to the study include:

• the desk study, where the attached bibliography contains the material reviewed
• a limited series of interviews with aid officials in Oslo and Stockholm
• case material from Mozambique and Tanzania, taking advantage of two major reviews carried out in these two countries that generated material relevant to this study

Report highlights shortcomings in its preparation and suggests suggests a need for a wider study to encompass Nordic experiences: more attention in the future to be paid to the considerable work that has been carried out regarding the experiences of sector coordination/sector budget support: and another area that merits more work is donor practices. Norway’s fragmentation of its cooperation financing according to own priorities is one example,and the degree to which this is common ought to be looked into.

Report concludes that conceptual and empirical issues need to be developed. At the conceptual level, it is important that some agreement can be reached on how to measure costs and benefits of aid coordination. Right now, vast and increasing resources are going into this area without there being a clear idea about whether the coordination efforts are being done in a rational way or not. A trans-action costs approach to this problem appears to be one of the more promising avenues.

In the empirical field, a program of case studies should be developed that would track some interesting cases and analyze what characterizes what are considered to be “best practice” examples. Without some solid empirical foundations, it is difficult to see how aid coordination efforts can be steered in better directions.