Aid Effectiveness

Ensuring ADB's "limited" resources are used effectively to help countries achieve sustainable development results

Challenge	The challenge for donors and partner countries is how to manage the scarce development assistance available as effectively as possible to achieve sustainable development results.
Strategy	In 2005, ADB and the development community adopted the Paris Declaration on Aid Effectiveness, which defines five principles for making aid more effective. Indicators and targets were developed for all five principles. ADB is committed to achieving the targets agreed upon by 2010.
Response	In collaboration with our development partners, ADB is making our assistance more effective and will continue to do so through a variety of planned initiatives in the years ahead.

The Paris Declaration

Five principles for making aid more effective are defined by the Paris Declaration: (1) country ownership of the development agenda; (2) donor alignment with country priorities and systems; (3) harmonization of donor policies, procedures, and practices; (4) managing for development results; and (5) mutual accountability.

Specific indicators and targets were developed for all five principles. The Paris principles were reconfirmed at the Third High Level Forum on Aid Effectiveness (HLF-3) in 2008, where the Accra Agenda for Action identified the challenges remaining and the actions necessary to accelerate progress on achieving the aid effectiveness agenda.

ADB is carrying out the principles of the Paris Declaration

As a signatory to both the Paris Declaration and Accra Agenda for Action, ADB commits itself to sharing responsibilities in a defined, transparent, harmonized, and mutually accountable way.

To enhance aid effectiveness, we have been harmonizing our policies, procedures, and practices with principal development partners, including other multilateral development banks through technical working groups and operational policy roundtables.

We are actively engaged in promoting country ownership of development projects, donor alignment with country systems, donor harmonization; and introducing improved approaches for managing for development results. And we are participating in international efforts to monitor and evaluate progress on the Paris targets on aid effectiveness.

Mainstreaming Paris Declaration principles at ADB

ADB is also mainstreaming Paris Declaration principles into our operations at the country and institutional levels. And we have been monitoring our progress in reaching targeted goals by 2010 through annual surveys and independent evaluations.

In 2007, ADB conducted a monitoring survey on our implementation of the Paris Declaration that covered 13 Asian Development Fund countries. A second round of monitoring was conducted in 2008 for 17 countries, including the original 13.

Results of the second round show improvement for most indicators. Shortfalls exist, however, that will require additional efforts to meet targets.

Reasons for shortfalls include capacity constraints in partner countries and institutional constraints in ADB. We are taking action to systematically address these concerns.

The Accra Agenda for Action

The 2008 HLF-3 expanded the discussion on aid effectiveness to include the role of civil society, aid management in fragile and conflict situations, and the evolving aid architecture, including parts played by new and nontraditional donors. Gender equality and environmental sustainability also featured prominently.

The Accra Agenda for Action lays out a framework for improving implementation of the Paris Declaration’s five aid effectiveness principles, identifying three ways to accelerate aid effectiveness progress: (1) enhanced country ownership, (2) building more effective and inclusive partnerships, and (3) achieving development results and being accountable for them.

Accra Agenda for Action implementation

To enhance ownership national dialogues need to become more inclusive of stakeholders, including parliaments, local governments, civil society, media, research institutes, and the private sector. Conditionality must be more transparent and aligned to national development plans.

Channeling aid through country systems must be a priority and assessment of systems must be performed using mutually agreed diagnostic tools. Moreover, donors need to justify the use of parallel systems.

It will also be necessary to develop capacity in partner countries to ensure both the country’s leadership of the development agenda and adequate use of country systems. In addition, better division of labor between development partners is essential to avoid duplication of effort and increase aid’s value for money.

Most importantly delivering and accounting for results will be a major focus going forward. Transparency of public financial management and aid flows is to be promoted through national accountability mechanisms and international accountability which will be enhanced by more active participation of partner countries in the regular donor peer reviews of the Development Assistance Committee.

ADB is carrying out the principles of the Accra Agenda

ADB is already well aligned and addressing most issues raised and actions advocated by the Accra Agenda. We are promoting country ownership of the development agenda. We are enhancing strategic partnerships with stakeholders such as the private sector, foundations, and civil society, including incorporating the role of civil society organizations in aid management and implementation, capacity development, and enhancing results.

Advancing the Paris Principles and Accra Agenda through partnerships

ADB has been communicating with the Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee to bring more Asia and the Pacific partner countries into the Working Party on Aid Effectiveness.

We are also working more closely with our development member countries and development partners within specific country contexts to continue localization of the Paris principles and implementation of the Accra Agenda.

ADB and the United Nations Development Programme, with other development partners, set up a Capacity Development for Development Effectiveness Facility to strengthen capacities of partner countries for development effectiveness in Asia and the Pacific. A multi-stakeholder community of practice has also been established to promote south-south learning. We will use our experience in regional cooperation to promote south-south cooperation.

Especially exciting is this: expectations of partner countries, civil society, and other stakeholders are now raised, and they are assuming leadership on this agenda.

Because this will require additional accountability from us, future ADB monitoring surveys will include more countries. And surveys will be reported on in the coming years leading up to the Fourth High Level Forum on Aid Effectiveness in 2011.