Development aid: where to next?

The first High-Level Meeting of the Global Partnership for Effective Development Cooperation launched 38 new initiatives by government, business, private foundations and civil society in Mexico last month. Photo: AGCED Mexico

Last month some 1500 people from over 130 countries gathered in Mexico City for the latest international jamboree on development aid. The ‘Global Partnership for Effective Development Cooperation’, an OECD/UNDP-led effort  to improve aid effectiveness by encouraging better partnerships between aid donors and aid recipients, had to confront some really tough questions. Do some countries still need development aid? Does aid really work that well? And what is ‘aid’ anyway?

Over the last decade, the developing world has dominated global economic growth. There are now 103 middle-income countries and the number (happily) continues to rise. Although much of the attention has been focused on the rapid economic advances made by the ‘big beasts’ of the developing world —Brazil, China and India— others are also doing well; Sub-Saharan Africa has grown at, on average, 5-6% annually over the last decade.

Some developing countries have become major donors themselves, such as Mexico, Turkey, Kazakhstan and South Africa. Arab donors have also become more prominent and last month the UAE posted the highest aid levels of all donor countries as a percentage of gross national income (at 1.25%).


As more countries develop and expand their aid programmes, the debate as to whether any of this aid actually works has still not been laid to rest. For its part, the Global Partnership’s recent progress report on aid effectiveness reported mixed results on improving aid quality.







We also need to allocate resources more effectively and fairly between countries and to decouple a larger share of decisions on aid from domestic politics. In practical terms, this requires a much bigger commitment to the pooling of aid resources, which could help to simplify an increasingly complex development financing landscape and, if done well, ensure that all countries have a voice in aid allocation decisions.


This post was originally published on SPERI.