If Jean Chrétien is true to his word, Africa will top the agenda at this month's Group of Eight summit in Kananaskis. African leaders have proposed a New Partnership for African Development (NEPAD), to which G8 leaders are busy preparing their response. In a nutshell, the Africans are saying they will put their political and economic houses in order and, in return, they expect the industrial countries to provide aid, private investment and access to their markets. Assuming that at least some African countries will keep their part of the bargain, how will the industrial countries be held to account?
African proponents of NEPAD are developing a peer-review system to monitor and evaluate their actions on the political and economic fronts. Such a system will present a report card, by Africans themselves, on the steps being made by African states toward democracy and opening their economies. For its part, the G8 will make some pledges at Kananaskis to support eligible African countries -- likely those countries getting high grades in the peer-review process -- with aid. But there is no monitoring and evaluation system to track the actions of the donor countries against their pledges.
Studies by the World Bank have shown that, in the past decade, donors have been notorious in demanding various economic reforms (trade liberalization, privatization, better fiscal and monetary policies) from developing countries. But donors subsequently cut their aid programs, despite the fact that some recipients actually implemented the requested reforms. The World Bank studies suggest that donors should have done exactly the opposite by increasing their aid rather than cutting it.
The fact is that the aid system's architecture is inadequate to ensure that donors are keeping to their pledges and doing their utmost to make sure that every aid dollar has the maximum benefit for the poor in recipient countries.
There is a peer-review mechanism among aid donors at the Development Assistance Committee of the Organization for Economic Co-operation and Development in Paris. But this system has existed for four decades without having any discernible effect on the policies or behaviour of aid donors. Generally speaking, donors continue to engage in whatever practices they choose, from cutting their aid budgets to tying procurement to domestic suppliers, no matter what their peers in the donor community think.
Yet, there is no shortage of performance-monitoring mechanisms for aid recipients. A key mechanism is the annual "consultative group" meeting. Despite the innocuous name, these meetings, are crucial. They are usually attended by each recipient country's leading donors, which look to the World Bank and the International Monetary Fund to assess the extent to which the country is on track with its economic reforms. The assessment determines the extent to which recipients must take corrective action (if they are off track). Donors, meanwhile, make token pledges to the recipient country, depending on its performance in adhering to the reform program.
But, until recently, there have been few measures to assess whether donors have kept their pledges. An experiment has begun in Tanzania to track the performance of aid donors. An independent monitoring group has been established to assess donor behaviour against pledges and examine other aspects of the aid effectiveness of donors, individually or collectively. Even if they adhere to their commitments, there are many practices followed by donors, such as tying their funds to national suppliers or to particular uses by the recipient, that undermine the integrity of the recipient's development efforts. The independent group will present its findings to the annual Tanzanian consultative group meeting.
Such independent monitoring mechanisms could be useful tools for improving the effectiveness of individual donors or for pointing to ways in which the collective efforts of donors can be better co-ordinated. Depending on how the Tanzanian experiment works, similar mechanisms should be initiated in other recipient countries. Another idea would be to use the consultative group format in reverse, with each donor meeting its principal recipients on an occasional basis. This could be done in a number of ways. For example, the Canadian International Development Agency could meet representatives of its principal African partners in the health sector to help establish what works and what is in need of improvement. Other donors, including multilateral agencies such as the World Bank, could do the same.
While care needs to be exercised to ensure that such tools do not become too weighty for recipient countries, so-called "reverse consultation" might help to balance the relationship between developed and developing nations when it comes to aid.
"Putting the shoe on the other foot" might well be an effective part of the solution as the G8 prepares the way for implementation of the NEPAD action plan.
Roy Culpeper is president of The North-South Institute.
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