Alternative Aid Modalities

The economic downturn and resulting pressure on budgets of donor governments has put aid budgets (in the UK and elsewhere) under increased pressure to achieve results and added to existing concerns amongst the public around what aid is actually achieving.

Such pressures have led to an increased focus not only of monitoring results more closely, but also delivering aid through programmes that formally link funding to results achieved during implementation. Such Performance-Based Approaches are already in use in the aid system, especially in service sectors, as examples below show:

  • The European Commission (EC) makes up to 30% of its general budget support contingent for its Millennium Development Goal (MDG) contracts dependent on annually monitored performance
  • The Global Fund links future funding tranches to performance in key delivery areas, with technical assistance available where constraints are identified
  • The World Bank contracts water services from private providers who then get paid based on how many people get services etc

Despite the obvious attraction of such results-based approaches to delivering aid, they have noteworthy weaknesses. Commonly identified concerns around such approaches include:

  • Failure to provide sufficient up-front resources for implementation
  • Avoidance of risky or challenging projects, where results are harder
  • Weakening country ownership where donors impose them
  • Limited evidence to date they deliver improved results

It is for these reasons that proposals for donors to only deliver aid once results have been achieved – e.g. Cash on Delivery – are particularly worrying and need to be promoted very cautiously. Positively, approaches by the EC and Global Fund (see above) seem to respond to a lot of these concerns.

UK approaches to Alternative Aid Modalities

The UK government has made only limited use of Performance-^ Based Approaches to date^ . ^ The UK deals with more serious concerns around performance in recipient countries receiving ^ by making a limited proportion of budget support contingent on performance on key areas.

More on Performance Based Approaches:

‘Cash on Delivery’ on the Centre for Global Development website

DfID’s Approach to Value for Money (VfM) (2011)

UKAN Policy Paper – “The Challenges for Improving the Impact of the UK’s Aid”

International Development Policy Paper “One World Conservatism”, Conservative Party

UKAN response to the Conservative International Development Policy Paper