The time has come for aid to be accountable

With governments around the world short of money, the likelihood of substantial cuts in foreign aid and development budgets is increasing. A YouGov poll in April found that 71 per cent of Americans want lower aid spending—32 percentage points more than want those who want to reduce the next most unpopular budget item, environmental expenditure. And in Britain, although the coalition has decided to ringfence the budget for the Department for International Development for now, its responsibilities may increase, forcing cuts.

The International Aid Transparency Initiative’s (IATI) aim is to make sure reduced resources are used more efficiently by putting details of aid spending into the public domain. The IATI encourages and standardises disclosure from both governmental and non-governmental donors, publishing the terms, amount and destination of assistance. Karin Christiansen, director of the organisation Publish What You Fund and member of the IATI steering committee, believes that the standards are like “HTML, agreed weights and measures, or an accounting standard; without common formats we couldn’t communicate on the web or buy and sell effectively.”

Supporters of the IATI believe putting information into the public domain will make it easier to hold donors to account. Comparing standardised data on several types of aid could also help academics and policymakers develop more effective models of aid delivery. And most importantly for the looming debate over aid budgets, more accessible information could strengthen the connection between assistance and impact. Studies and focus groups, such as one run by the New Zealand government in 2004, have shown that provable outcomes strengthen support for aid spending and lead to increased donations.

At the moment eighteen major donors, including the World Bank, Asian Development Bank, the European commission, Germany and Britain have signed up to the IATI.  Even though the United States and Japan are holding out, there are some encouraging signs from the former. At the Accra aid conference two years ago, the Bush administration pledged its “active support” for the principle of transparency, while the IATI fits with the Obama administration’s attempt to put government information on the internet. Increased transparency is also at the heart of the new US strategy for meeting the Millennium Development Goals. Most interestingly, seven recipient countries, including Rwanda and Colombia, have endorsed the initiative, showing an increasing acceptance that disclosure is an important part of the aid process.

Of course, for increased transparency to work, the information will need to be acted upon by policymakers. Even in the digital age, studies show that the public consistently overestimates public spending on foreign aid, making it unlikely that they will rush to look through detailed data. Similarly, despite clear evidence that poorly delivered aid can be counterproductive, interventions by donor countries or international institutions to improve aid effectiveness are still regarded with suspicion in some quarters.

Although initiatives like the IATI can help deliver better aid, and should therefore be vigorously supported, they will have to have the support of politicians and NGOs.