To assess the evidence on the best channel to support development results, we examine 45 papers that empirically test the associations between bilateral and multilateral aid flows and various outcomes, including gross domestic product growth, governance indicators, human development indicators, and the level of non-development investment flows. The results suggest that differences between countries and regions, time periods, aid objectives and individual donor organizations can influence the effectiveness of bilateral and multilateral aid. However, we do not find consistent evidence that bilateral or multilateral aid is more effective overall. Given the emphasis on national ownership of the development process, it is expected that the roles of different stakeholders will change in the coming months and years. First, the government should be encouraged to take the lead in developing its programme and organizing donors and other stakeholders to contribute to operationalization. This means a more hands-free role for the bank and fund, which should become government advisers rather than process leaders. Therefore, from the point of view of the Bretton Woods project, the better the process is likely to be, so it should be insisted that Governments encourage as much participation and feedback as possible on the programme and that this is reflected in a meaningful way for donors. For example, donors could ask what range of people the government was involved in the policy framework, to what extent it solicited feedback, how it responded to those comments, why it changed its strategy in light of these factors or not, whether there was a media debate about the strategy, etc. Such a process is necessary because donors are unable to make objective judgments or specify indicators that can tell them what a “good” poverty reduction strategy is in each case. This can only really be judged by the people of the country, so it is important to integrate a wide range of civil society perspectives into the process.
Since the objectives of these programmes are poverty reduction and they have been defined by bilateral donors as International Development Goals (IDTs), governments are also not responsible for the objectives of the programme. We may not agree with these goals, but we must admit that many governments and sections of civil society may not see them as priorities. Experience to date with NGO participation in national processes, in particular contributions to the Bank`s country assistance strategy, has tended to limit its contributions to an advisory role, although they have been involved to some extent in the policy-making process. It will be useful for INGOs to be able to bring these experiences together to enable better advocacy work and engagement. Bilateral donors need to be better coordinated and cooperative to ensure that their programmes support the national strategy and that sufficient resources are committed and made available in a timely manner to implement them effectively. In some cases, bilateral donors should play a greater role in the programme formulation process, where Governments will encourage them to do so. The framework offers significant progress. The SFAO is the Bank`s response to the problem that conditionality cannot effectively lead to sustainable policy reforms and that adjustment programs have not led to poverty eradication because economic instruments take precedence over social objectives. The SFAO aims to restore the balance between macroeconomic and structural and social policies by creating a framework for understanding the links between them. Clearly, national and international NGOs have considerable experience in addressing poverty needs and could make a very useful contribution to programming and should not simply be seen as service providers. This is particularly evident in the social spheres, but there is also a reason for civil society to participate in macroeconomic policy decisions, such as budgeting. The first part of this paper briefly examines the links between social policy and these new initiatives.
Part 2 focuses on the PRSP as a mechanism for operationalizing the Congregation for the Doctrine of the Faith and promoting the initial objectives of the Social Principles. I propose to take the PRSP process as a framework for discussing how the relationship between international non-governmental organizations (INGOs), national non-governmental organizations (NGOs), bilateral donors and multilateral institutions is likely to change in light of new processes and the impact on the role of each individual, in particular as regards political dialogue. The first step will be to determine the extent and causes of poverty. At present, there is usually a lack of good data on poverty. In the absence of reliable data, a participatory poverty assessment (PPA) is needed. To fund them, governments in the South should be persuaded to divert resources from costly and underutilized investigations to cheaper, local PPAs. Donors – UNDP and some bilateral donors have been major donors under recent PPAs – should continue to allocate resources to fund PPAs, which should include building government capacity for systematic and ongoing data collection, as the Ugandan PPA has done, for example. It may also be necessary to support neutral third parties in the systematic monitoring of state efforts to address the causes of poverty, especially at the level of local authorities. While donor resources are critical, the success of the Ugandan PPA shows how important it is for PPAs to be owned and managed by the government. According to its website, USAID is “an independent agency that provides economic, development, and humanitarian assistance worldwide in support of U.S. foreign policy objectives.” (2) USAID provides assistance to countries in sub-Saharan Africa, Asia, Europe, Latin America and the Caribbean, as well as the Middle East, to initiate development work in the areas of education, health, poverty reduction, agriculture, environment, etc.
In the area of global health, USAID conducts programs to prevent, care for, and treat HIV/AIDS, strengthen health systems, fight infectious diseases, and work to improve maternal and child health through immunization, better nutrition, etc. More information can be found on the career page. Governments are also likely to rely on advice from IFIS and other donors at an early stage. This is practical both from a capacity perspective and to ensure that donors are involved in the programme at an early stage. However, governments should also have considerable room for manoeuvre to draw on a wide range of expertise to assist them in programming, such as universities, independent advisers, UN bodies and policy advisers of INGOs operating in the country. We are still waiting to see which countries will be the first to develop PRSPs, with likely candidates including Uganda, Tanzania, Bolivia, Mali, Guyana and The Gambia, among others. At this stage, it is not possible to estimate how the process will actually work in practice, but it is possible to examine how we think it should work and how the different stakeholders will participate in it, and therefore the impact on their roles and responsibilities. This is the purpose of Part 2 of this document. These principles could have been a useful mechanism to ensure that the impact of macroeconomic requirements is fully taken into account and compatible with social objectives, so that they would have been useful in operationalizing the SFAO; and perhaps a useful resource for Governments developing poverty reduction strategies. However, the process of developing the principles is stalled, mainly because some governments do not necessarily agree with certain principles, such as core labour standards, and are wary that the end result could be greater conditionality in the Bank`s and the Fund`s programs. In addition, the Bank`s contribution has been reduced to focusing on best practices in social policy in times of crisis. The new approach has indeed introduced another level of conditionality: process conditionality.
It is probably not a problem if the government has the capacity, the will and the political strength to develop its own programs. However, for weak governments that do not have the political power to stand up to the bank and the fund, the new process is likely to mean the usual political conditionality, with the added conundrum of having to go through a process that might be more likely to be avoided. Foreign aid donors face many decisions about how to disburse aid and must be able to justify these decisions to their constituents. Among the decisions that donors must make is the question of whether they should allocate through bilateral or multilateral channels. Bilateral aid is distributed directly from donor countries to recipient countries or multilateral organizations with restrictions imposed by donors on their use. Multilateral aid is distributed by bilateral donors to multilateral organizations without restriction of use and then disbursed by those multilateral organizations such as the World Bank and the various United Nations agencies. According to the OECD, about 30% of aid is generally disbursed multilaterally. The Social Principles are a response of the international community to the social crisis triggered by the financial collapse in Southeast Asia. Like the codes of monetary policy and budget transparency, social principles aim to establish guidelines for good social policy, which all countries should be required to implement. .
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