Ever since the summit in Gleneagles in 2005, development policy has become a regular focus of G8 meetings. Again, at the G8 annual summit last week in Muskoka, Canada (25-26 June 2010) a substantial part of the discussions was dedicated to these issues. In the Muskoka Declaration, six out of sixteen pages directly cover development policy, the remainder covers the topics: environmental sustainability and green recovery, trade and investment, and international peace and security – topics which are obviously of much relevance for developing countries, too – arguably of even more relevance than policy decisions in the area of development cooperation directly.
But let us now look at the decisions directly focusing on development assistance. The central element is the “Muskoka Initiative for Maternal, Newborn and Under-Five Child Health“. Recognizing that reaching the Millennium Development Goals (MDGs) relating to these objectives until 2015 still remains a considerable challenge, G8 governments promise to mobilize an additional 5 billion USD in support of these objectives during the next two years.
While the recognition of insufficient progress (although somewhat halfheartedly excused by the recent financial and economic crisis) is an important step, reiterating objectives and making new financial promises is not necessarily helpful in itself. It is, for instance, not at all clear what “additional” is supposed to mean. No benchmark is provided against which this additionality could be measured. Are these funds supposed to be additional as compared to current volumes of aid? Since many observers expect development assistance to drop as a consequence of recent economic and budgetary constraints in many donor countries, this is not very plausible.
Moreover, “additional” support to developing countries has already been promised in other areas where the debate about what this financial additionality could mean is currently in full swing: In the context of international climate change policy, the Copenhagen Accord promises 10 billion USD of new and additional funding annually until 2012, increasing to 100 billion annually by 2020 (see, e.g., the iied briefing paper on the topic, coauthored by Martin Stadelmann (CIS), Timmons Roberts and Saleemul Huq). The Copenhagen Accord, too, is explicitly supported by the G8 Muskoka Declaration.
Apart from financial promises, the Muskoka Initiative underlines already internationally agreed principles of development cooperation, i.e., primarily, development country ownership, donor coordination, and transparent monitoring and evaluation practices. However, here again, the challenge lies in the implementation and in solving the inherent conflicts within these objectives. Ever since the ownership debate has come up in the late 1990s, the problem how to do justice to the ownership principle when donor and government interests simply do not coincide has not been solved. Should such a country then just not receive any aid? The current trend to cover a maximum of countries so as to avoid “aid orphans” runs against such selectivity. And even if general interests do coincide, donors maintain their right to withhold their funding if certain requirements for transparent budgeting and monitoring procedures are not in place. In certain countries, this still leads to considerable problems to transform commitments into actual disbursements.
Donor cooperation is an important objective as it can at least ensure (among other things) that development country governments are not facing diverse (and partially contradictory) terms and conditions. Indeed, some encouraging approaches have been started in this context, including joint funding and delegated cooperation activities. At the same time, this may strengthen the donors’ position when enforcing the conditions eventually retained. While this is certainly positive if the government’s non-adherence to these conditions hinders development, this may be questionable in certain cases – and in any case, this certainly does not foster ownership and the desire to have the development country government “in the driver’s seat”.
While these problems are well-known (although rarely made explicit), there is another problem with donor cooperation and donor division of labor which is often overlooked: If donors really managed to commit most aid jointly, or to divide support for different countries and sectors amongst themselves according to some self-declared “comparative advantage”, it would no more be possible to hold individual donors responsible for their aid allocation decision. The problem is that actual “comparative advantage” is not easily assessed and, for simplicity, often assumed to be proportional to financial volumes spent in a certain sector. A donor whose aid allocation was criticized by researchers and NGOs for being too much oriented at economic or foreign affairs will have a strong focus in such areas. If he now even more strongly focuses on these areas and leaves other fields to other donors, nobody will be able to challenge him any more on this basis.
Thus, monitoring recipients will become easier, but monitoring donors will become more difficult. This may be bad news for development policy as soon as its priorities are in conflict with interests by powerful lobbies in donor countries, e.g., related to trade, resource exploitation, or political hegemony.