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Foreign Aid TransparencyThe success of foreign aid is often shadowed by misconceptions and myths ranging from effectiveness to large overestimates of how much money is spent on aid every year. In an effort to combat some of these myths, foreign aid transparency has become a central issue both globally and domestically. Understanding where funds are being spent is important to donors and citizens as will be explained below. Keep reading for a few facts about foreign aid transparency and where you can find more information on how your nation’s dollars are being used to provide aid to the developing world.

Why Transparency Matters

Transparency includes knowing how much money is spent, where it is spent, who spends it and the overall impact and results. Global foreign aid transparency matters because as nations try to reach the Sustainable Development Goals, this measure will act as the foundation for aid effectiveness and accountability. Aid transparency is important to donor and recipient governments as well as civil society. As citizens who pay taxes, it is reassuring to know exactly where foreign aid funds are being spent and this transparency encourages greater support for foreign aid.

In order to coordinate aid efforts and prevent donors from spending more funds in certain areas and less in others, transparency is key. When donor countries and nonprofits share what they have already spent or are planning to spend, other donors can coordinate their funding off of these numbers and reduce overlap. It is important for donors to research and discuss their funding plans with other nations to achieve greater impact with their limited resources.

Recipients of aid benefit from transparency as well because it is often difficult to know how much aid is given and where it is spent in their own countries. This, in turn, makes it more challenging for governments to decide how much of their own budget to spend on certain problems. Additionally, when aid recipients are not able to show foreign aid money in their budgets or plans for the country, it is much more challenging for citizens and parliaments to hold leaders accountable and corruption can become an issue.

Increasing Accountability with the Aid Transparency Index

One way transparency has improved in recent years is through Publish What You Fund’s Aid Transparency Index. This organization uses research and advocacy to improve transparency mainly through the International Aid Transparency Initiative (IATI). The IATI commits donors to publish all foreign aid data under a common standard that can be compared and accessed easily.

The 2018 Aid Transparency Index was recently launched on June 20. It is the only independent measure of aid transparency among major development agencies and governments making it a valuable tool for foreign aid. This year’s index evaluates 45 countries on a scale from very good to very poor transparency.

This organization uses a relatively complex and detailed methodology for monitoring transparency and scoring agencies. For the most recent Index, 35 indicators were selected that drew upon IATI standards and whether they were upheld. These indicators were then weighted and split into five categories. Organization planning and commitments to transparency are 15 percent of the score, finance and budgets are 25 percent, project attributes, development data and performance are equally split into 20 percent of the score as well. The website also includes a comparison chart on how agencies have improved or declined and extensive reports explaining the Index’s findings.

How to Evaluate a Country’s Transparency

The Index is one very detailed way citizens of major donor countries can easily check their country’s score and whether or not their aid agencies are being transparent. One must simply click on the agency they are interested in to view scores in each category, how they have changed in recent years and recommendations for years to come.

Besides the Index, for individuals in the U.S., there are currently two separate dashboards for USAID and the State Department to share where aid dollars are spent. These can be found at ForeingAssistance.gov and Foreign Aid Explorer. This year, the U.S. was included in the “good” category on the Aid Transparency Index meaning there is still room for improvement.

In 2016, Congress passed the Foreign Aid Transparency and Accountability Act (FATAA) that established requirements for these agencies to publish foreign assistance data. One final provision suggested that USAID and the State Department combine their data into one dashboard by the end of the fiscal year 2018. It is yet to be seen whether this will happen or not but it could be one way of boosting U.S. foreign aid into the very good category for next year’s index.

These are some of the ways that aid transparency has improved in recent years and why it is such a crucial issue for donors, recipients and civil society.

– Alexandra Eppenauer
Photo: Flickr

Foreign_Aid_Transparency_and_Accountability_Act
The Foreign Aid Transparency and Accountability Act has passed a full vote in the House of Representatives – a move that was welcomed by aid advocacy organizations including The Borgen Project.

In a statement released after the vote, the Modernizing Foreign Assistance Network (MFAN) commended Representatives Ted Poe (R-TX) and Gerry Connolly (D-VA) for sponsoring the bill and thanked house leadership for moving swiftly to bring it to the floor. “At a time when the U.S. is facing an unprecedented number of humanitarian and development challenges around the globe, efforts to ensure our foreign assistance is being spent effectively, like this legislation, must be prioritized,” MFAN said.

The legislation, which received bipartisan support, would strengthen the government’s commitment to maximizing aid transparency and effectiveness in a few ways. It would require the President to develop uniform interagency guidelines for measurable goals and performance metrics. And, it would ensure that U.S. foreign aid agencies use these guidelines to consistently monitor and evaluate their programs and provide comprehensive aid data to the public. By doing so, legislators hope to better track and allocate scarce aid resources.

Despite public perception, less than one percent of the federal budget is allocated for foreign aid – around $54 billion compared to over $600 billion in military spending. This money funds 110 missions undertaken by USAID in over 100 developing countries including health and education initiatives, security and peacekeeping missions, economic development and disaster relief.

At a time when Congress is seeking across-the-board spending reductions, the FY2016 budget includes $6 billion less in foreign assistance than last year. It is, therefore, vital that development agencies use every dollar as efficiently as possible.

“Foreign assistance plays an important role in advancing American national security interests in the world, creating new markets for American businesses and helping improve the lives of millions of people living in poverty. However, we must also always demand the highest standards of transparency and accountability to ensure that our foreign assistance efforts are making the most meaningful impact possible in the communities we assist,” said Tim Nelson, Congressional Relations Manager at The Borgen Project.

A companion version of the bill sponsored by Senators Marco Rubio (R-FL) and Ben Cardin (D-MD) passed the Senate Foreign Relations Committee in November and must now pass a full vote before being sent to the President for signing.

– Ron Minard

Sources: The Borgen Project, Congress.gov, MFAN
Photo: Flickr