1. CAPE Centre for Aid & Public Expenditure Beyond the country level 1. Dynamics of global aid system 2... and how they affect country level 3. Scaling up: opportunities and risks 4. Possible new carrots and sticks 5. International coordination forums 6. Aid management strategies

2. CAPE Centre for Aid & Public Expenditure Features of global aid system Multiple players, motives Limited user choice/info No external regulator, monitors Some self-regulation Independent supply-driven allocations Short commitment horizons

3. CAPE Centre for Aid & Public Expenditure How might this affect MA? Aid envelope set independently of PRS Donor orphans and darlings No functioning sanctions for donors Some herd instincts, fragility

4. CAPE Centre for Aid & Public Expenditure Scaling up of aid ($80b.-130b.)  Risks:  Major sources NOT like-minded, slow  Real money versus phantom aid  Traditional channels bypassed  +++New initiatives Opportunities: + recipient power could help donor orphans Could lead to pools with better rules Donors on record

5. CAPE Centre for Aid & Public Expenditure Possible new carrots and sticks  Sector budget support, overt and covert  Variants of selective challenge funds e.g. MCA.  Innovative finance mechanisms: rule- based, mixed governance, flexible, possible elements of recipient choice, longterm commitment basis

6. CAPE Centre for Aid & Public Expenditure International support for MA International support for MA Contractual partnerships: EU model Regional monitoring forums DAC future role, DAC-WB tandem UN options South-South: mutual cartelisation Common ratings standards

7. CAPE Centre for Aid & Public Expenditure Some aid management strategies Establish nonnegotiable rules Diversify approach to big new donors Court midsized, independent friends Plan longterm graduation by type of donor, creditor. Prepare for worst-case exit scenarios Keep capital/recurrent cost mix in view