Does Aid Work in India? by Lipton Michael;Toye John; & JOHN TOYE

Author:Lipton, Michael;Toye, John; & JOHN TOYE
Language: eng
Format: epub
Tags: Development Studies
Publisher: Taylor & Francis Group
Published: 2010-11-24T00:00:00+00:00

Donor procedures

Since the mid-1970s, donors have become increasingly aware that their own procedures of aid-giving may impose significant avoidable cost on the recipient of aid. By ‘procedures’ is meant the whole cycle of political and bureuacratic activity that accompanies the actual transfer of resources. It is a wide-ranging term covering the donor country’s method of authorizing its aid budget, making aid policy, programming aid by country and sector, project preparation and approval, the actual disbursement of funds, and the ex-post monitoring and evaluation of aid-funded activities. Complying with these procedures requires effort and resources from recipients, in terms of negotiation and documentation. Failing to comply also imposes costs, either in terms of delays to existing projects and programmes, or in terms of lost opportunities of gaining additional foreign resources.

Some of these costs would appear to be imposed unnecessarily. Although these procedures all have the basic aim of the efficient mangement of aid funds, they assume a great variety of different forms as between different donor countries. The supposition must be that some standardization between donors is possible and would be beneficial in reducing recipients negotiation and compliance costs. The standard argument against this has been that standardization of procedures cannot be carried out without very difficult changes in the constitutional frameworks of the donor countries. However, a recent study of the problem concluded that this explanation was not entirely valid, on the grounds that:

During the course of this study, a small number of donors have made changes in their procedures which appeared previously to be impossible from a legalistic point of view (e.g. multi-year commitments, field missions) without major revisions in the bureaucratic or legislative framework of their aid programmes.

(OECD, 1981, 73)

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