What should count as aid?
Jonathan Pickering
PhD candidate, Centre for Moral, Social and Political Theory
Australian National University
Australasian Aid and Development WorkshopAustralian National University13 February 2014
Outline
1. Why revisit aid eligibility?
2. The OECD definition and the question of development intention
3. Current exclusions
4. Proposed exclusions
5. Recommendations and conclusion
2
1. Why revisit aid eligibility?
• Changing geography of poverty • Broader flows of financing for development• Post-2015 goals• Policy contention in Australia over refugee
costs, climate finance
3
2. OECD work on measures of development finance• Develop new measure of Total Official
Support for Development (TOSD)• Investigate whether to revise definition of
Official Development Assistance (ODA)
4
ODA: the current definition
• Donors: governments of OECD countries• Recipients: on the DAC list of developing
countries• Concessionality: grants or low-interest loans• Development intention: “administered with the
promotion of the economic development and welfare of developing countries as its main objective”
5
Criteria for a definition of aid
• Integrity / credibility– Maximise development-oriented funding – Filter out incompatible interests (the “that’s not
aid!” test)• Adaptiveness
– To changing development needs– To understandings of good development
practice
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3. Current exclusions: rationales and examples• Primary benefit to donor
– Counter-terrorism– Carbon offsets
• Non-developmental benefits to recipient– Military aid– Peacekeeping– Social and cultural programs
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+ risk of adverse impacts
4. Proposed exclusions: in-donor costs
• Reasons for exclusion:– Primary benefit to donor / uncertain benefit to
recipient country (scholarships)– Risk of adverse impacts (refugee costs)
• Reasons for inclusion:– Budgetary effort for donors
8
Proposed exclusions: climate finance
• Reasons for exclusion:– Diversion of funds from existing development
priorities– Remedying harm (entitlement not aid)– Global public good
• Reasons for inclusion:– Adaptation and development closely linked– Safe climate a precondition for development
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Climate finance: the problem of diversion
10Source: Tomasi (2014).
5. Recommendations
• In-donor costs: cut down on problematic cases
• Include climate finance but safeguard against diversion through:– Eligibility caps– Innovative financing sources
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DAC scenarios for redefining ODA
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Concessionality
Dev’t intention
Current ODA
(Net disbursement)
$127 bn
Source: OECD 2014 (using 2012 ODA data).
‘Focused’ ODA
(Budgetary expenditure)
$114 bn
‘New’ ODA(Budgetary effort)
$129 bn
‘Updated’ ODA(Gross
disbursement)
$138 bn
Narrow
Broad
Broad
Total Official Support for
Development
Interactions between ODA and total support: a scenario
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Concessionality
Dev’t intention
Current ODA
Revised ODA
Broad
BroadNarrow
