1. The Foreign Aid System-Where is it Heading?
Andrew Rogerson, ODI
ICEA, 5 Oct 2004

2. Coverage Drivers of International Aid System Aid Volume
New Instruments

3. 1-The aid system as a whole
Why have aid agencies at all?
A market? No exits, weak consumers
Weak owners
Partly insulated management
Competing: visibility, influence, flexibility
Wal-Mart and corner stores?

4. 1- Drivers of Systemic Change
Shifting aid objectives: poverty, security, commerce..
Institutional barriers to competition.
Changing demand from both good and bad “clients”
Symbiotic relationship with NGOs and private flows: competitors/collaborators

5. Simplistic scenarios on two axes
Aid goals more or less poverty-focussed;
Stimuli to competition higher or lower.
Stylised cases:
Pluralist=more competition+poverty focus
Fragmented=more comp, less pov. focus
Statist=less com, more pov. focus
Realpolitik= less comp, +less poverty focus

6. 2-Aid volume considerations
Costing goals ($50b) :absorption worries
ODA recovery 2002/3 “non-structural”?.
Project versus program aid.
Acceleration devices: the IFF
Rising tide floats all boats?

7. New instruments and terms
Incrementalism vs. architecture
US MCA: aid as selective entitlement
Grants versus loans: IDA
Global Funds
IFF as potential market-shaper
Rating services for private flows: “unbundling”.

8. 5-Harmonisation: (DAC work in progress)
Ownership
Partners set the agenda
Reliance on national systems
Alignment on partners’ agenda
Alignment
Common arrangements
Simplification of procedures
Sharing information
Harmonisation

9. Harmonisation-open questions
Grand cartel or flexible syndicate?
Consolidation in aid industry?
Internal incentives to cooperate-visibility, compliance
Working themselves out of a job
Self-regulation versus ……?