See below for a guest post from MFAN Principal Noam Unger, fellow and director of the Foreign Assistance Reform Project, and Homi Kharas, senior fellow and deputy director of the Development Assistance and Governance Initiative, both of the Brookings Institution. They offer recommendations for how the U.S. can match its rhetoric on reform with concrete action – seeing tomorrow’s forum in Busan as an opportunity for the U.S to be more assertive, particularly on the issue of transparency. This post originally appeared on the Brookings Up Front blog.
Busan, the United States and Transparent Development Results
Noam Unger and Homi Kharas
Tomorrow marks the beginning of the High Level Forum on Aid Effectiveness in Busan, Korea. The United States is attending with a particularly high power delegation, led by Secretary Clinton, to underscore U.S. leadership abroad on technical and political aspects of development policy. The U.S. government heads into the forum with a handful of priority themes, including country ownership, partnerships with the private business community and philanthropists, and transparency, sustainability and results. The United States seeks to be a leader in these areas and has the rhetoric to match, but much more needs to be done to connect the language of commitment to the reality of U.S. development activities. With the right balance of pressure and political space, the Busan forum may present the opportunity for the United States to step up its game, especially on transparency and results. In each of these areas, the United States can tangibly advance new tools for catalytic cooperation.
With regard to transparency, the United States is approaching a critical milestone. One year ago, the Obama administration unveiled its foreign assistance dashboard website and published the Quadrennial Diplomacy and Development Review, which touted aid transparency as a key principle of high-impact development. Despite leading in other areas of transparency by pushing the Open Government Partnership into existence, for much of the past year progress on aid transparency seemed to have stalled. The dashboard was limited to a synthesis of previously available State Department and USAID budget and appropriation data in a user-friendly format and there was no progress on the promised expansion of the website to include multiple categories of data across all U.S. government agencies implementing foreign assistance. The 2011 Quality of Official Development Assistance assessment found that the United States ranked 12th out of 31 donors in the category of transparency and learning, which does not exactly correspond to leadership in these areas. This assessment is generally corroborated by Publish What You Fund’s Aid Transparency Index.
But just last week, in anticipation of the forum new data was finally published to the dashboard to reflect information on planning, obligations and expenditures from the U.S. government’s Millennium Challenge Corporation. This was a long-anticipated step since the MCC was designed to serve as a model of aid transparency and has consistently led in this area, by scoring the best, for example, among U.S. agencies in the Publish What You Fund index. To build on this momentum, the United States should publish a specific schedule for adding data from more agencies and categories to the dashboard in the way it was originally envisioned. That would bring the United States closer to a position of true leadership and make it into the largest provider of data consistent with the standards developed by the International Aid Transparency Initiative (IATI). In fact, there is even speculation that the United States might officially sign up to the IATI, which would be very welcome given that the United States has shaped these standards as an observer and already come close to substantial implementation, even without officially being an IATI signatory.
The United States also stands out in its commitment to a results-based focus in aid delivery, pioneered by the Millennium Challenge Corporation, which was set up with an explicit framework for “measurable results”. The MCC approach starts with monitoring processes and outputs at the country level during its country selection and compact design phase, and then continues to track higher-level outcomes and impact as compacts mature. This approach is now being taken up by other development agencies, including the International Development Association (IDA), the concessional arm of the World Bank.
The IDA has proposed a new financing instrument called Performance for Results (P4R) to indicate its commitment to the idea that development results are the key objectives, not just expanding the size of government spending in partner countries. The instrument is demand-driven and has strong country ownership because it supports programs designed by the countries themselves. Disbursements would be linked to achieving results. This puts a greater premium on transparency and accountability—no results, no aid—and helps transform the dialogue in a constructive way onto metrics of development and cost-effective means of delivery. The IDA is in a good position to push the envelope in this direction because it is ranked as the most transparent aid agency in the world. Of course, there are issues of information, control of resources, and environmental, social and program sustainability, and these would have to be closely monitored within the program. Like any innovation, lessons from the first operation would have to be systematically incorporated into future designs. For example, one important unknown is how best to strengthen the capacity of countries to prepare and monitor their own programs without undermining ownership.
The United States should support P4R and encourage other institutions to embrace the transparency and results agenda. The Busan forum calls for innovative approaches and new partnerships that can be aligned around a common results framework. If the U.S. can raise the profile of this agenda across the globe, it can reinforce its leadership position on development.