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Aid Transparency Index Improves Development Data
Publish What You Fund: The Global Campaign for Assistance and Development Transparency, an NGO watchdog, created the Aid Transparency Index in 2010 to compare the levels of transparency among aid agencies. Today, it is the only independent measurement for transparency among major development agencies. It aims to improve the efficacy of development assistance by refining the quality of data that donors make public.

How Does it Work?

Donors that are part of the Aid Transparency Index have to meet at least three of four requirements, which are:

  1. The organization has to be in majority public ownership, with one or more governments as shareholders.
  2. Its main purpose must be either to provide development finance and/or aid across the world or to oversee the administration of these resources.
  3. It must play a leading role in setting finance and/or aid policy in its home country, sector or region.
  4. Its budget or resources must be at least $1 billion per year.

The donor’s commitment to transparency is measured by the existence of legislation or disclosure policies, intentions for International Aid Transparency Initiative (IATI) publication and the promotion of information access, use and re-use.

The Aid Transparency Index takes into account 35 indicators to monitor aid transparency, which have been selected based on the IATI Standard. The Index collects most of its information from organization websites, the IATI Registry or from national data platforms. Two of the 35 indicators collect information from other data sources for assessment purposes.

The 2020 Index

The latest index revealed that there has been a great improvement in the donors’ overall transparency since 2018. More than half of the donors on the list now rank as “good” or “very good.” This results from an increase in data quantity and quality in the IATI Standard, which has made data more centralized and accessible.

Eleven donors are now in the “really good” (meaning in between the “good” and “very good”) category, which constitutes an increase of four from 2018. Also, 15 donors are now in the category of “good,” two more than two years ago. These are the organizations with the highest ranks in the 2020 Aid Transparency Index:

  1. Asian Development Bank (ADB) — Sovereign Portfolio with a ranking of 98.0/100.
  2. World Bank, International Development Association (IDA) with a ranking of 97.1/100.
  3. UNDP with a ranking of 96.6/100.
  4. African Development Bank (AfDB) – Sovereign Portfolio with a ranking of 95.5/100.
  5. Inter-American Development Bank (IDB) with a ranking of 95.4/100.
  6. UNICEF with a ranking of 92.9/100.
  7. The United States, Millennium Challenge Corporation (MCC) with a ranking of 92.1/100.
  8. Global Fund with a ranking of 86.5/100.
  9. The United Kingdom, Department for International Development (DFID) with a ranking of 85.4/100.
  10. Canada, Global Affairs with a ranking of 80.9/100.

Addressing Shortfalls

Despite these improvements, gaps still exist between donor publications and their projected outcomes. Many organizations publish their objectives, but only a minority also publish information on the projects’ performances and evaluations. As a result, there are limitations to measuring the effectiveness and value of financial spending in development assistance.

So, to further improve development aid data, Publish What You Fund provides a series of recommendations to donor countries. This includes sharing more information on project results, publishing project budget documents and increasing the participation of stakeholders in partner countries. Altogether, this will contribute to building trust and increasing available information.

Why is it Important?

Today, billions of dollars of aid and assistance are going toward addressing the COVID-19 crisis, which highlights the crucial role that aid transparency plays and how it can contribute to better results when it is formalized.

“Aid transparency is a key way to improve the efficiency of resource allocation, coordination of the response, and for donors to learn from one another’s interventions,” says Gary Forster, the CEO of Publish What You Fund. “The Index provides an illustration of what’s possible when transparency is valued and institutionalized.”

Helen Souki
Photo: Flickr

Foreign Aid Policies In 2019, the Overseas Development Institute came out with the principled aid index to assess the degree to which donor countries are contributing to a prosperous world. According to the report, the principled foreign aid policies not only benefit the country that receives the aid, but it also serves the interests of the donor country. Below is a list of how this report’s top five countries are using their foreign aid:

5 Countries Foreign Aid Policies

  1. Luxembourg is a small country in Western Europe that has pledged 0.96% of its gross national income (GNI) to go towards development and aid. It is one of the few countries that meet a goal set by the U.N. to dedicate 0.7% of a country’s GNI to foreign aid. Luxembourg starts by targeting some of its partner countries, which include Burkina Faso, Nicaragua, Mali and Senegal. With remaining funds, Luxembourg helps provide humanitarian assistance in Kosovo, the Palestinian territories and Vietnam. The country also focuses on private enterprises through microfinance and inclusive finance to help promote productivity. In 2020, Luxembourg joined the International Aid Transparency Initiative which motivates the government to share data about foreign aid spending with the public. Accountability is an important factor in creating sustainable aid.
  1. The United Kingdom is another country that has met the U.N. goal of 0.7% of GNI for foreign aid. The U.K. set the goal back in 1974 but recently achieved it in 2013. Additionally, the government inscribed the goal into law in 2015 so that the country now has a legal duty to achieve it. Around 64% of the U.K.’s foreign aid goes to countries for bilateral aid. The main recipients of bilateral aid include Pakistan, Ethiopia, Nigeria, Syria and Afghanistan. The remaining 36% of the U.K.’s foreign aid goes to multilateral institutions like the E.U. and the U.N. Additionally, the U.K. has also provided humanitarian aid for Liberia and Sierra Leone during the Ebola outbreak. Also, the country offered assistance to Nepal and Indonesia — following natural disasters and Somalia during the hunger crisis.
  1. Sweden has continuously met the U.N. goal since 1976. The country even made its own goal to dedicate 1% of its GNI to foreign aid in 2008. In 2019, Sweden allotted 0.98% of its GNI for foreign aid. Along with Norway, Sweden is considered to be a “humanitarian superpower.” The Swedish development cooperation, also known as Sida, is Sweden’s leading agency for providing foreign assistance. Sweden has 33 partner countries that it helps by creating income opportunities and strengthening democracy. Sweden is dedicated to helping achieve the U.N., 17 Sustainable Development Goals (SDGs). The country’s primary goals include human rights, democracy and the rule of law, gender equality, the environment and climate change, health equity and education and research.
  1. Norway has met the U.N. goal for providing foreign aid since 1976. In 2019, Norway apportioned 1.02% of its GNI for foreign aid and development. Norway’s foreign aid policies use an approach that follows the 2005 Paris principles. These principles value ownership, alignment, harmonization, managing for results and accountability. Norway provides foreign aid funding for civil society organizations and budget support. The country also uses a large part of its budget to help people inside its borders. For example, Norway has used part of its budget to provide for its refugee population, which included more than 50,000 refugees in 2019.
  1. Ireland currently does not meet the U.N. goal, but the country is hoping to double its impact by 2025. In 2017, 0.36% of Ireland’s GNI went toward its foreign aid budget. Ireland’s foreign aid focuses on developing countries in sub-Saharan Africa. The country hopes to combat the issues of displacement and conflict, which Ireland’s main concern — climate change, tends to exacerbate. Additionally, developing countries are more likely to feel the effects of climate change disproportionately as compared with developed countries.

Striding Forward

These five countries’ foreign aid policies are impressive examples of how developed nations can make valuable contributions to global well-being. Hopefully, more undeveloped countries continue to benefit from foreign aid policies of more developed nations. Likewise, it is important these developed countries continue their efforts to achieve the U.N. goals, for theirs and the world’s greater benefit.

Camryn Anthony
Photo: Pixabay