Dani Kaufmann, recently retired from the World Bank, keeps up his prodigious efforts at Brookings with a new article on Aid Effectiveness and Governance. How can donors reconcile poor governance in some countries with the pressing needs made that much worse by the financial crisis? Money quote:
...given the current financial crisis in the rich world and the dire implications for developing countries, the donor community will need to do its utmost to maintain its honor funding pledges and ensure better management of aid delivery, including ensuring much more selectivity, and identifying modalities of funding and programs that maximize development effectiveness (and not always focused on central government). In addition, reformist leaders and civil society in recipient countries must show the resolve to implement governance reforms, which is paramount for development impact.
In fact, developing country stakeholders (including government officials) are sending donors a clear message on the need for aid selectivity and effectiveness, one which is yet to be heeded. These stakeholders in emerging and developing countries are of the view that their own quality of governance should be a determinant of whether a donor like the World Bank provides or withholds funds from the country or not, and it should also be a factor in deciding to which institution inside or outside the government such funding should be provided.
Update: Dani Kaufmann has more harsh words about aid effectiveness, donor harmonization, and the financial crisis over at the Kaufmann Governance Post: "Let me start by echoing a panel member in advancing an unorthodox interpretation for donor ‘harmonization’: lowest common denominator agreement among donors regarding their strategy towards a recipient country. Spineless strategies, devoid of innovation, and skating over the toughest challenges for development."
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