Foreign Aid Transaction Costs: What are they and when are they minimised?

'Transaction costs' are commonly referred to in the recent literature on aid effectiveness. Aid transaction costs, however, have been neither consistently defined nor measured. This article defines aid transaction costs as all the economic costs associated with aid management that add no value to aid delivery. This enables the 'net' transaction costs that should be minimised to be identified. An analytical framework is then developed for assessing these costs. This allows the effectiveness of different aid modalities to be compared, according to the characteristics of the aid transaction. The article shows that the choice of aid modality should depend on these characteristics and, therefore, that the minimisation of transaction costs should not be an end in itself.Peer reviewe

Poverty-Centred Rural Road Funds Sharing in Sub-Saharan Africa

Poverty-centred allocation of funds for rural roads and their systematic prioritisation are important to enhance sustainability, provide equality of transport opportunities and mitigate poverty. The aim of this work was to investigate and develop new approaches with specific emphasis on sub-Saharan Africa, given that the existing decision systems do not appropriately consider social impacts and poverty. An understanding of rural road funds allocation and road scheme prioritisation to alleviate poverty is important as road transport is by far the most predominant form of transport in Africa. This study developed new allocation and prioritisation processes for rural roads based on expert opinion surveys and empirical evidence, which were then applied to analyse allocation and road scheme selection processes used in Uganda and Ghana. The study found that the multi-dimensional poverty index is the most highly prioritised factor in rural road scheme selection and, for regional rural road funds sharing, poverty is equally weighted with the rural accessibility index. A goal programming model, based on expert opinion weightings, is recommended for poverty alleviation

Explore, Scale Up, Move Out: Three Phases to Managing Change under Conditions of Uncertainty

Private sector development is dominated by the use of ‘good practice’ solutions, driven by a desire of the development donors to control the outcome of development initiatives – with limited success. Bottom?up participatory approaches are more appropriate to find solutions for the complex challenge of market and private sector development. Theory?based approaches are used to design and deliver solutions to economic development challenges. We argue that these approaches have limited potential to manage interventions that target systemic change in complex contexts. On the other hand, alternative approaches based on emergence have some essential shortcomings from the perspective of the international development system. Based on our own working experience, we propose a pragmatic way forward that aims to build on the strengths of emergence?based approaches in complex contexts but is designed to work in the current development environment

Compliance with International Norms: Implementing OECD DAC Principles in South Korea

This study raises the question of what determines compliance with the OECD DAC framework on the basis of a case study of South Korea. This research argues that fragmented institutional structures limit the bureaucratic capacity for greater compliance. At the same time, the findings illustrate that lack of interest from dominant institutions can limit the consolidation of political will for change at the national level. This study has implications for future DAC donors in that special and peer reviews can be useful methodologies to identify current limitations for change. Finally, the study emphasises the importance of consolidated political will in terms of readiness to adopt global standards at the domestic level before commencing membership and obligatory processes

Building resilience from the ground up

This paper provides an overview and commentary on a special issue of the journal Disasters that reflects on experiences in resilience-building. Experiences are drawn from two recent DfID-funded programmes in some of the world’s most climate-vulnerable countries and contexts. These programmes have focused on scaling up action to build resilience, principally through the expansion and replication of good practices by influencing government policies, plans and investments. The papers provide insights that are each grounded in different contexts and understandings of local realities and the factors that support and undermine people’s resilience

Livelihoods, conflict and aid programming: Is the evidence base good enough?

In conflict-affected situations, aid-funded livelihood interventions are often tasked with a dual imperative: to generate material welfare benefits and to contribute to peacebuilding outcomes. There may be some logic to such a transformative agenda, but does the reality square with the rhetoric? Through a review of the effectiveness of a range of livelihood promotion interventions—from job creation to microfinance—this paper finds that high quality empirical evidence is hard to come by in conflict-affected situations. Many evaluations appear to conflate outputs with impacts and numerous studies fail to include adequate information on their methodologies and datasets, making it difficult to appraise the reliability of their conclusions. Given the primary purpose of this literature—to provide policy guidance on effective ways to promote livelihoods— this silence is particularly concerning. As such, there is a strong case to be made for a restrained and nuanced handling of such interventions in conflict-affected settings.Department for International Development - PO511

Trials and tribulations : the 'use' (and 'misuse') of evidence in public policy

Randomized controlled trials (RCTs) are increasingly playing a central role in shaping policy for development. By comparison, social experimentation has not driven the great transformation of welfare within the developed world. This introduces a range of issues for those interested in the nature of research evidence for making policy. In this article we will seek a greater understanding of why the RCT is increasingly seen as the ‘gold standard’ for policy experiments in low- and middle-income countries (LMICs), but not in the more advanced liberal democracies, and we will explore the implications of this. One objection to the use of RCTs, however can be cost, but implementing policies and programmes without good evidence or a good understanding of their effectiveness is unlikely to be a good use of resources either. Other issues arise. Trials are often complex to run and ethical concerns often arise in social ‘experiments’ with human subjects. However, rolling out untested policies may also be morally objectionable. This article sheds new light on the relationship between evidence and evaluation in public policy in both the global north and developing south. It also tackles emerging issues concerning the ‘use’ and ‘misuse’ of evidence and evaluation within public policy

The sum of its parts? Sources of local legitimacy

The article analyses the sources of local actors’ legitimacy perceptions towards international peacebuilding operations. Local legitimacy perceptions are increasingly recognised as shaping local behaviour towards international peacebuilding, which influences the effective functioning of the operation. Legitimacy debates in peacebuilding are either absent or imported from the literature on domestic legitimacy, without respect to the specific temporal and spatial situation of international operations. The article first explores which legitimacy sources influence local legitimacy perceptions of international peacebuilding operations. It finds that two sources are relevant: output and procedure. Second, it investigates how exactly legitimacy arises from them. In doing so, it demonstrates that output and procedure are umbrella terms comprising several sub-elements which influence legitimacy in different, sometimes contradictory, ways. Finally, the article empirically explores which of the sources are important to local actors’ legitimacy perceptions using field data from the EU peacebuilding operations EULEX in Kosovo and EUPM Bosnia-Herzegovina