• Aid harmonisation

Aid harmonisation

The Paris Declaration (PD) was long overdue. The predominance of conditionality in the aid environment has been harmful in its impeding of internal state building; its insistence on specific economic programming and its forceful accountability of those in public office. Such ‘intervention’ has sought to have been addressed in the PD but with its emphasis on aid partnerships between recipient governments and donors is there potential collateral damage for democracy in developing countries? For instance could a trend to harmonisation with partner governments, be at the expense of the participation of other relevant local actors, such as parliaments, civil society or public oversight institutions?

This paper explores the effect of ‘aid harmonisation’ in Peru. There a large number of NGOs in Peru, the majority of which operate outside national development priorities and are funded by donors who bypass central government. However, although this causes aid fragmentation and weakens state control the author asserts that ‘private’ NGOs are able to provide opportunities to the many poor communities left behind by national development priorities; whilst donors have to a contend with a highly centralised, politicised unilateral style of government.

Subsequently, the author argues that donors engaged in Peru are unhappy with the Paris Declaration’s proposals and instruments – they contend that Peru’s needs cannot be solved via the PD’s preference for budget support; that the centralised nature of the new instruments does not match the decentralised nature of poverty in Peru; that there are risks of further politicisation in the use of resources, if aid is limited to following government priorities - further damaging the democratic process. 

Nevertheless, the current fragmentation of aid activities is harmful to the aid system as a whole – increasing transaction costs, reducing impact and preventing adequate control by supervisory bodies.
Subsequently the paper offers a series of recommendations to address the need to protect ‘democracy’ and promote aid harmonisation:

• support programmes for the decentralisation of government aid whilst supporting its efforts to coordinate funds
• continue support for a basket of funds for the Ombudsman
• sector-wide budget support for regional governments
• capacity building programmes for regional government
• support programmes for the administrative decentralisation process
• Coordinated programmes for civil society empowerment
  

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