An International Aid Agreement Romilly Greenhill Policy Officer ActionAid International UK

What is the problem? Fundamental problem = unbalanced accountability Excessive upward accountability Donors impose heavy burden of conditions onto recipient governments Weak downward accountability Donors not accountable to recipients or to poor people Recipient governments focus more on donors than on the poor Need to shift to mutual accountability

Elements of an International Aid Agreement Clear financing policies from aid recipients Shift from conditionality to mutual commitments International forums to review donor progress Guaranteed sources of development finance

1. Clear financing policies Recipients prioritize forms of donor aid, and rank donors Recipients reject aid that fails to meet minimum criteria Options for poor scoring donors: Redirect aid through reformed multilaterals Silent partnership agreements Leave the country or sector

2. From conditionality to mutual commitments Commitments drawn from international agreements Upward accountability reinforces downward accountability Donors make commitments too: Aid volume Aid quality (predictability etc) Policy coherence (trade, environment)

Monitoring recipient compliance Revised CG meetings Recipient failure to comply – aid may be withheld BUT Minimum resource transfer Commitments linked to specific tranches of aid No suspension in within the financial year Shift funding through CSOs or UN where possible Hold funding in trust

Monitoring donor compliance Revised CG meetings Sanctions against donors Naming and shaming Refusing aid Reporting to UN Commissioner on Aid

3. International Forums Annual international meetings Donors and recipients attend as equals Under ECOSOC? Regional organisations involved e.g. ECA, African Union Full transparency and CSO participation UN Commissioner on Aid Aid ombudsman reporting to UN SG

Functions of International Meetings Progress on aid quality, donor by donor Progress on policy coherence Assessment of Real Aid by donor Aid allocations across countries Best practice Problematic areas

4. Guaranteed sources of financing Binding long term commitments from donors 0.7% by 2010 Commitments at country level Innovative sources of development finance Taxes on currencies and airlines IFF as second best option

Conclusions Accountability is heavily skewed Need to shift from one-sided conditionality to mutual accountability International Aid Agreement is aspirational rather than realistic Elements can be put in place independently Need to shift from donor self regulation to international regulation and greater recipient country choice and voice.