Thursday, January 22, 2015

Do we need more ODA for governance reform?, by Eduardo González Cauhapé-Cazaux

The inclusion of a goal on governance in the post-2015 framework has been one of the most hotly debated issues in the search for a successor to the Millennium Development Goals (MDGs).  This topic has generated - and will continue to generate - discussions across the development community. Some believe that peace and effective institutions are both development outcomes in their own right as well as vehicles to deliver other development goals. Others are not necessarily contesting this, but fear that including a goal on peace and institutions could detract from other development goals. The final proposal from the Open Working Group includes a goal on the promotion of peaceful and inclusive societies for sustainable development. The prospect of keeping this goal in the final agreement now looks more favourable. 

This leads to the question of whether development co-operation is in a position to contribute effectively to this new goal on governance and peaceful and inclusive societies. 
If the contribution is measured in terms of funds allocated the response would be in principle affirmative.  Of course, more funds are needed globally to be invested in development in general; however, the proportion of funds currently allocated to governance support compared to other development sectors is enough.

The recent review of Development Assistance Flows for Governance and for Peace  prepared by the OECD showed that in 2012, the “governance and peace” sector is the one which received the most funds:  In 2012, Official Development Assistance (ODA) totalling USD 17 285 million[1] was disbursed to support governance and peace in developing countries. This represents 15.7% of total sector-allocable ODA (saODA) – the highest amount provided to any sector”.  By comparison, traditional sectors like education or health received respectively 10.5% and 8.6% of total sector-allocable ODA. Actually, if ODA used to strengthen line ministries, which is currently counted as part of ODA to their respective sector, were considered as aid for governance, this percentage would be around 20% of total saODA.

These figures are quite impressive particularly if we consider that governance is absent from the current MDG framework. But at the same time, this should not be a big surprise. It shows that development partners understand that having a capable and inclusive state is crucial for development, that any development outcome will face problems of sustainability if institutions are not consolidated.
However, even if there are significant resources devoted to these issues there is still a question of whether they are well used.  In theory there may be enough funding in volume – but is there enough in quality?  There are certainly question about distribution of resources, with some countries receiving high volumes of support and others very little.   There are also questions about modalities, with several reviews of public sector managementprogrammes showing uneven results. 

Evidently, more efforts need to be made in order to ensure that our actions will really make a difference.  The good news is that there are plenty of people thinking about how this could be done (see for example the DDD manifesto or the Thinking and working politically group). The DAC Network on Governance (GovNet) is also contributing to these efforts.  The network is currently collecting information and analysing different examples of innovative approaches to promote governance reforms. Another study is exploring how relatively new modalities, like results-based financing is working on governance support. We expect that these studies will help to increase the quality of the work in those areas.

Beyond funds, what is needed to reform governance systems? The answer is more innovative approaches and less business as usual. 

See the attached report “DevelopmentAssistance Flows for Governance and for Peaceful and Inclusive Societies” which includes data on how and where official development cooperation funds for governance and peacebuilding are allocated.

Eduardo Gonzalez Cauhapé-Cazaux
Governance Advisor

The views expressed in our blogs remain those of the authors and do not necessarily represent the views or policies of the OECD or its members

[1] From DAC members and multilateral organisations.