As the international community gathers to discuss the post-2015 development agenda and how best to finance the Sustainable Development Goals, it is important we learn from our mistakes and redress the recipient-donor relationship, says Roger Riddell, an associate at international development consultancy, Oxford Policy Management.

Ten years ago, OECD representatives gathered in Paris to discuss how to improve the impact of aid. In my view, this was one of the most important discussions on aid effectiveness ever to have taken place. Why?  Because for the first time, donors formally acknowledged not merely that the overall impact of aid would be considerably enhanced by their working together and strengthening the role of aid recipients, but that their failure to do just this had become a major factor in reducing the overall impact of aid. 

In signing the resulting Paris Declaration—framed around the five key principles of ownership, alignment, harmonisation, results and mutual accountability—donors not only pledged to work more closely together, but they committed themselves to specific goals and targets to be achieved by the year 2010.

It’s disappointing to note, therefore, that, a decade on, most of the core problems that Paris sought to address still remain—a number have even become more pronounced. For example, the increasing concern of individual donors to ensure that “my” aid is effective has eclipsed the crucial need of directing aid to the sectors that would benefit most and in such a way that it helps to build local capacities. What is more, the overall amounts of aid given still remain volatile, unpredictable and only loosely linked to those who need it most.

We won’t know until early next year whether the latest set of aid effectiveness targets—drawn up in Busan in 2011—have been met (though last year’s Global Partnership Monitoring Framework was cautiously optimistic).  Perhaps the real benchmark for performance of these Busan commitments, however, is actually another set of aid-related goals: the expiring Millennium Development Goals (MDGs).

Lessons from the MDGs

The MDGs represented the global community’s commitment to achieving a number of key development outcomes. Despite the ambition and good intentions, however, we’ve seen real progress only in relation to half of the eight goals.

Because the original principles aimed to address the huge inefficiencies of the current aid system, they remain central to the future effectiveness of aid. Despite our best intentions, these messages somehow got lost during the MDG process.

What should be done? For a start, we need to reduce the volatility and unpredictability of aid.

One way would be to begin serious discussion of realistic, legally binding commitments from donors to honour the pledges they make at international aid conferences. While the MDG discussions were initially successful at galvanising increasing financial support in line with development targets, promises of more aid soon failed to materialise.  Between 2000 and 2005, the total volume of official development assistance (ODA) from countries in the OECD’s Development Assistance Committee (DAC) rose by almost US$50bn.  However between 2005 and 2014 ODA rose by only US$6bn. Binding commitments are now being discussed in relation to climate change funding. We now need to extend this discussion to ODA.

Another criticism levied at the MDGs was that they triggered a focus on donors moving into recipient countries to oversee, manage and, in some cases, implement short-term, outcome-based projects that actually delayed, or even undermined, long-term efforts to build up and strengthen local capacities and institutions. For example, some have pointed to the Ebola outbreak and its rapid spread as a symptom of the sorts of systemic problems that can arise from a blinkered focus on short-term targets.

An urgent task—again central to the Paris Declaration—is to prioritise initiatives that strengthen both the local ownership of development plans and local capacities to implement these plans. One way donor countries could support this is by providing long-term funding to assist the development of strong, independent and locally-rooted think tanks. They could also focus on building capacity within the institutions of recipient countries, passing on best practice knowledge and expertise on aid coordination.

The basic principles outlined in the Paris Declaration are as relevant today as they were ten years ago. In fact, they are even more pertinent now as the world prepares to agree a set of Sustainable Development Goals (SDGs) and commits to the funding mix—including aid funding—to help achieve them. Shifting towards an aid agenda that promotes and prioritises recipient-country ownership and coordination, better alignment with, and use of, recipient country systems and greater harmonisation between donors is essential. Without this shift even a rise in the amounts of aid given will be eclipsed by the continuing inefficiencies of the current aid system.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.