Submission - UK Sustainability and Transitions Working Group

 

Introduction

The UK Sustainability and Transitions Working Group is made up of UK based NGOs, think tanks and academic institutions working on issues relating to sustainability and transitions, primarily in the global health arena. We define ‘Transition’ as a process by which a country that was previously receiving external donor funding through Official Development Assistance has that money reduced, ended or it is transferred to another programmatic aim. The transition can take place slowly or suddenly, leading to a change in aid relationship between the donor and recipient. A sustainable transition is one that protects development gains and ensures that the societal changes that are evoked by aid processes are long-lasting and transformative.

 

We welcome the broad scope of this inquiry and submit our answers to the following questions:

  1. What do you think international aid should be for? Is international aid effective at reducing poverty?
  2. How should the rules and norms of international aid be set? Who decides what success looks like and how do we measure it?
  3. Should aid be finite and, if so, what should be the trigger to ending it? Should aid be conditional, and what should those conditions be?
  4. What should be included in the UK’s international development strategy and what does the economic growth model set out in the Integrated Review of Security, Defence, Development and Foreign Policy mean for the development strategy?
  5. Is there a ‘gold standard’ that donors should aspire to and are there examples of best practice among donor countries?
  6. How is the UK Government held accountable to the UK taxpayer and the countries and communities where the programmes it funds are delivered?
  7. What is the role of different development actors such as International financial institutions, multilateral organisations, large International Non-Governmental Organisations (INGOs), small INGOs and national NGOs?

 

We believe that addressing these questions will help to ensure that UK aid is delivered in an effective, sustainable and accountable way, putting those who are most marginalised and vulnerable at the centre of the Government’s approach.

 


 

  1. What do you think international aid should be for? Is international aid effective at reducing poverty?

International aid has led to significant reductions in global poverty in recent decades. From 1990 to 2015, poverty decreased by roughly 1% per year, slowing to 0.5% since 2015.[1] However, COVID-19 is causing global poverty to rise for the first time in 20 years. In 2019, 8.4% of the world’s population lived below the poverty line and is due to increase by 1% by the end of 2021, affecting 110 to 150 million people.[2] Many countries are expected not to recover to their pre-pandemic levels of economic activity until 2024 and the crisis has slowed down the trajectory of countries becoming less reliant on aid, with nine countries forecasted to fall back into their previous income per capita group, compared to only one country pre-crisis.[3]

 

The Sustainable Development Goal (SDG) framework remains a relevant blueprint to eliminating extreme poverty by 2030, something that can only be achieved if all donors, including the UK, ensure that their Overseas Development Assistance (ODA) budget, delivered at 0.7% of Gross National Income (GNI), remains focused on poverty and inequality alleviation. However, the UK’s role in contributing to the SDGs could be undermined by unplanned and poorly managed transitions, particularly in the context of cuts to ODA and shifting priorities within FCDO away from a poverty focus as laid out in the Integrated Review.

 

To help ensure international aid effective at reducing poverty, a transition framework would help ensure that sustainability, poverty and inequality are prioritised at all stages of the investment process of international aid. Such a framework should outline that decisions around the allocation and withdrawal of ODA are conducted in a transparent and evidence-based manner, recognising the context of countries transitioning from low to middle-income status. Decisions to reduce aid are often made using economic indicators alone, such as GNI per capita, which masks huge inequalities. For example, 82% of “the new poor”[4] may be concentrated in middle-income countries (MICs). Decisions about aid allocation must, therefore, consider contextual indicators, such as health service coverage, disease burden, political strength and stability, physical infrastructure, and fiscal space.

 

When international aid is delivered for purposes other than poverty and inequality alleviation, it fails to accrue the same level of effectiveness and sustainability. For example, research assessing 144 UK aid projects delivering on the ‘UK security agenda’ found that the projects were unable to positively affect the strength, security and efficacy of recipient democratic institutions, due to over-optimism and a lack of country ownership and accountability.[5] Therefore it is important to ensure International aid is not instrumentalised as a means of pursuing self-interest, whether that be for diplomatic, trade or strategic purposes. Instead, the UK must allow its aid spending to be determined by demonstrated poverty impact and informed by locally articulated poverty alleviation priorities.

 


 

  1. How should the rules and norms of international aid be set? Who decides what success looks like and how do we measure it?

 

Global economic shifts have led to changes in geopolitical power and knowledge, with more governments and non-state stakeholders demanding a seat at the decision-making table. Shifts in wealth, however, does not necessarily mean a reduction in poverty and inequality. The poorest and most marginalised people, who are the focus of development work, increasingly reside in MICs.[6] Resultantly, the UK Government should actively enable the setting of rules and norms of international aid to be more democratic and less dominated by countries in the Global North, which, in turn, will support voices from marginalised communities to be heard within aid decision-making and governance.  Such an approach entails relevant and representative stakeholders, including country governments, impacted communities, and civil society, to be at the decision-making table around the allocation, direction and withdrawal of donor funding. This is something all Organisation for Economic Development (OECD) member countries committed to in the 2005 Paris Agreement on Aid Effectiveness[7]; recipient countries set their own strategies for poverty reduction and donor countries align behind these objectives and use local systems.

 

Nevertheless, decisions about the appropriate direction of technical and financial support are often done in absence of affected groups. For example, in its review assessing the Changing Nature of UK Aid in Ghana, the Independent Commission for Aid Impact (ICAI) found that the UK Government failed to include citizen consultation as a systematic part of programme design, monitoring or evaluation.[8] This creates a risk of decisions being made on the donor’s strategic interests rather than national needs and priorities, and composing timelines that conflict with the country government’s and other donors’ strategies. Involving relevant and representative stakeholders would mean that decisions and evaluating success are then based on local and national knowledge, therefore, aid is more targeted, realistic in achieving goals, and produces long term results.

 

 


 

 

 

  1. Should aid be finite and, if so, what should be the trigger to ending it? Should aid be conditional, and what should those conditions be?

 

The conventional logic of aid sees countries eventually “transition” from ODA with other types of finance expected to fill spending gaps once recipient countries’ incomes rise, despite the persistence of poverty in many instances. If, however, the purpose of aid is to deliver on the SDGs, significantly more funding is required than is currently available from donor and domestic resources. The UK Government echoed this sentiment in its response to the International Development Sub-Committee’s report on ICAI’s review on the Changing Nature of UK Aid in Ghana; “the global need for development finance far outstrips levels traditional donors can provide”.[9] It is, therefore, necessary to understand how countries that can afford to spend more, such as the UK, can take on long term financial responsibility for responding to emerging global challenges to support less financially able countries, leading to sustainable development outcomes.

 

Looking at aid as a global public good reframes it as an international public financing mechanism that does not just fill gaps, but can overcome global challenges and promote universal benefits. The alternative development framework of ‘Global Public Investment’ (GPI) takes such an approach.[10] GPI proposes a collective system to financing sustainable development based on co-responsibility and diffuse reciprocity, whereby all countries contribute on an ongoing basis, and all have a say in how the money is allocated to secure global public goods, services and infrastructure. The UK Government should consider how to support GPI’s paradigm shifts, and in the short term, however, improve its aid eligibility and allocation system to ensure the sustainability of investments for poverty and inequality reduction.

 

In 2010, the Department for International Development’s (DFID) ODA investment approach changed significantly to be driven by a core determination of eligibility based on GNI per capita.[11] If a country that DFID was working in was a MIC, DFID would withdraw funding and a country presence rapidly, without consultation or sufficient planning. This led to gaps in critical services and the reversal of hard-won development gains, with the most marginalised suffering disproportionately. In 2016, ICAI awarded the Department an Amber-Red rating[12] for its approach to transition, and stressed its concerns over the lack of subsequent progress when following up in 2018.[13] In 2019, DFID developed the ‘Working Principles on Transition’ which guide the planning and implementation of transitions, and began taking a ‘gradation’, rather than ‘graduation’, approach to aid relationships. Since the departmental merger, however, it appears that the FCDO does not have a strategy, or systematic approach, to ensure sustainable transitions, nor has it recommitted to the Transition Principles.

 

The Integrated Review proposes that “where countries can finance their development”, the UK Government will “move gradually from offering grants to providing UK expertise and returnable capital to address regional challenges in our mutual interest”. Such an approach to transition should be guided by a robust sustainability framework, building on the aforementioned DFID documents. This must include the development of a comprehensive eligibility and allocation criteria, across all departments with an ODA spend, which allocates sufficient support and resources to those most in need wherever they are, to ensure no one is left behind.

 

To realise this needs-based approach and maximise the impact of UK aid, the UK Government must use a broad range of social, political and economic indicators to guide its eligibility and allocation methodologies. Examples of these indicators include health service coverage, disease burden, political strength and stability, and physical infrastructure. Within economic indicators, the UK must look beyond solely using GNI per capita, which often hides huge inequalities within countries and can imply that countries can afford to take over health programming, despite debt burden constraints and limited ability to raise tax. Furthermore, any decision to withdraw or reduce external financing to a country must be led by a robust, context-specific impact assessment, accompanied by a risk mitigation framework.

 

 


 

  1. What should be included in the UK’s international development strategy and what does the economic growth model set out in the Integrated Review of Security, Defence, Development and Foreign Policy mean for the development strategy?

 

The UK’s International Development Strategy should:

 

        Outline the UK’s approach to transition, building on the ‘Working Principles on Transition’, that includes a robust, context-specific impact assessment, accompanied by a risk mitigation framework.

 

        Detail a democratic approach to aid that involves all relevant and representative stakeholders, including country governments, impacted communities, and a fully funded civil society, to be at the decision-making table around the allocation, direction and withdrawal of donor funding.

 

        Affirm that aid spending is to be determined by demonstrated poverty impact and alignment with locally articulated poverty alleviation priorities.

 

        Identify a broad range of social, political and economic indicators to guide its eligibility and allocation methodologies. Within economic indicators, the UK must look beyond solely using GNI per capita.

 


 

 

  1. Is there a ‘gold standard’ that donors should aspire to and are there examples of best practice among donor countries?

 

In 2019, DFID worked to the gold standard by being one of the only donors to develop ‘Principles on Transition’ and an accompanying ‘Guidance on Managing Transition’. These documents helped guide the planning and implementation of transitions, whilst serving to inform all relevant stakeholders involved in transitions of their role in the process and how DFID would  engage with them. Unfortunately, since the departmental merger, it appears that the FCDO does not have a strategy, or systematic approach, to ensure sustainable transitions. The FCDO should recommit to the Principles and develop a transition framework to ensure that sustainability, poverty and inequality are prioritised at all stages of the investment process of international aid.

 

A ‘gold standard’ approach to ensuring a needs-based approach to aid allocation is also found within the recommendations from the Equitable Access Initiative (EAI).[14] Launched by heads of several multilateral organisations, the Initiative explored what criteria should be used to determine funding eligibility. Their analysis found that GNI per capita is an imperfect proxy for understanding health needs or a government’s capacity to invest in health and that policymaking should not rely on a single variable to inform complex health financing policies on the eligibility for and the prioritisation of investments. It proposed that policymakers consider a more comprehensive framework for decision making that accounts for countries’ position on a health development continuum, based on the analysis of countries’ needs, fiscal capacity and policies.[15] The EAI also recommended that even when additional indicators such as disease burden are used, GNI should not be used as the sole economic indicator, and highlighted the importance of equity, both within countries and between countries.

 

Unfortunately, the majority of donors have either ignored or misquoted the findings of the EAI and did not significantly change their eligibility criteria. The only significant change at the time was the recognition of the need to mitigate the worst impacts of existing eligibility policies by improving transition policies rather than reviewing the criteria used. With the UK working on its International Development Strategy, they have another opportunity to reflect on and be guided by the recommendations from the EAI for their own approach to aid allocation.

 

 


 

 

  1. How is the UK Government held accountable to the UK taxpayer and the countries and communities where the programmes it funds are delivered?

 

ICAI has played an important function in keeping the UK Government accountable for its investments and approaches to transition. For example, under DFID, previous transitions from MICs led to the reversal of development gains and disproportionately impacted marginalised communities. As previously mentioned, in 2016, ICAI awarded the Department an Amber-Red rating for its approach to managing exit and transition in its development partnerships, concluding that it was “unsatisfactory in most areas”[16] and stressed its concerns over the lack of subsequent progress when following up in 2018.[17] This important accountability function that ICAI plays helped to influence DFID to develop Transition Principles and put adequate resourcing to respond to the challenges their reports highlighted. Given ICAI’s continued importance in the transition space and beyond, the UK Government and International Development Select Committee should continue its political, programmatic and financial support for an independent and effective ICAI.

 


 

 

  1. What is the role of different development actors such as International financial institutions, multilateral organisations, large International Non-Governmental Organisations (INGOs), small INGOs and national NGOs?

 

Multilateral organisations are highly effective at delivering a specific intervention at scale, shape markets and spread risk across projects. Gavi, the Vaccine Alliance, for example, provides the full course of WHO-recommended vaccines for $28 compared with the US price of $1100[18], and has immunised 822 million children, saving over 14 million lives, since its creation.[19] These efforts and investments, however, are undermined if they are withdrawn or reduced in an uncoordinated manner. Known as simultaneous transition, multilateral and bilateral donors withdrawing at the same time can contribute to dangerous financing cliffs for health services, impacting the quality and availability of healthcare, and cause gaps in coverage for human development services.[20] As a bilateral donor and board member of multilateral organisations, the UK is well placed to establish, in close collaboration with donors and governments, global and country-level coordination mechanisms with the central goal of producing a long-term, comprehensive, costed transition plan. Donor coordination strengthens the effectiveness of investments and partnerships; it ensures the full impacts of transition from different mechanisms are understood, that adequate preparations are taken, and that transition planning and support is not duplicative or run in parallel.

Building and maintaining strong relationships with civil society actors is a crucial component of advancing the work of different development actors and ensuring the UK Government has a long term life-changing impact. Civil Society Organisations (CSOs), which include international and national non-governmental organisations (NGOs), have a vital role in advocating for national ownership and financial and programmatic transfer of functions to sustain progress and ensure the longevity and effectiveness of the UK's engagement. This advocacy ranges from raising awareness of relevant issues within affected communities as well as supporting domestic resource mobilisation. CSOs are also able to use their expertise of other donors and multilateral organisational work to help determine each country’s priorities and capacity, and develop a needs assessment for individual country transition plans.

 

Yet, CSOs are often the first to feel the effects of transition, with funding cuts being more acute and starting earlier, particularly national NGOs, risking the closure of community-led development programmes in rural and poorer areas, without alternative funding options.[21] The UK Government must support a funded and effective civil society that delivers services and conducts advocacy, especially on behalf of marginalised and key populations before, during and after transition. The UK Government can do this by building direct relationships with CSOs, increasing the use of flexible funding agreements, outlining key mechanisms that encourage CSO-led innovation, and developing a comprehensive learning agenda with key milestones to progressively evaluate the engagement and adapt appropriately. The UK Government can also retain strategic support for CSOs through bilateral funding and supporting multilateral partnerships, such as Gavi. The UK Government should utilise tools, such as bridge funding for civil society or other key stakeholders, in circumstances where it becomes clear that to continue the transition process would unduly risk sustaining development gains.

 


[1] World Bank (2020). Poverty and Shared Prosperity Report. [online] . Available at: https://openknowledge.worldbank.org/bitstream/handle/10986/34496/211602ov.pdf.

[2] ibid

[3] Prizzon, A. and Pudussery, J. (2021). Literature review From aid to development partnerships Lessons from the literature and implications of the Covid-19 crisis. [online] . Available at: https://cdn.odi.org/media/documents/Aid_final2.pdf

[4] Howton, E. (2020). Poverty Overview. [online] World Bank. Available at: https://www.worldbank.org/en/topic/poverty/overview.

[5] ibid

[6] World Bank (2021). Poverty Overview. [online] World Bank. Available at: https://www.worldbank.org/en/topic/poverty/overview.

[7] Organisation for Economic Co-operation and Development (2005). Paris Declaration and Accra Agenda for Action - OECD. [online] www.oecd.org. Available at: https://www.oecd.org/dac/effectiveness/parisdeclarationandaccraagendaforaction.htm.

[8] Independent Commission for Aid Impact (2020). The changing nature of UK aid in Ghana. [online] ICAI. Available at: https://icai.independent.gov.uk/html-version/ghana/

[9] House of Commons (2021). The Changing Nature of UK Aid in Ghana Review: report from the Sub-Committee on the Work of ICAI: Government response to the Committee’s Sixth Report Sixth Special Report of Session 2019-21. [online] . Available at: https://reliefweb.int/sites/reliefweb.int/files/resources/HC%201198%20-%20Gov%20response%20-%20Ghana-Online-2.pdf

[10] Glennie, J (2019) Global Public Investment: Five paradigm shifts for a new era of aid. Joep Lange Institute. Available online: https://www.joeplangeinstitute.org/wp-content/uploads/2019/10/Global-Public-Investment-FULL-REPORT-Sept2019.pdf

[11] ​​Vaughan, J. and Raw, N. (2019). Laying the foundations: Principles of a sustainable, successful transition from external donor funding. [online] . Available at: https://stopaids.org.uk/wp-content/uploads/2019/05/Printing-Laying-The-Foundations.pdf.

[12] Independent Commission for Aid Impact (2016). When aid relationships change: DFID’s approach to managing exit and transition in its development partnerships. [online] ICAI. Available at: https://icai.independent.gov.uk/html-version/transition/.

[13] Independent Commission for Aid Impact (2018). ICAI follow-up review of 2016-17 reports. [online] ICAI. Available at: https://icai.independent.gov.uk/review/follow-up-2016-17/

[14] Global Fund (2016). Equitable Access Initiative. [online] www.theglobalfund.org. Available at: https://www.theglobalfund.org/en/archive/equitable-access-initiative/

[15] The Equitable Access Initiative (2016). Equitable Access Initiative Report. [online] Available at: https://www.theglobalfund.org/media/1322/eai_equitableaccessinitiative_report_en.pdf?u=637233412100000000.

[16] ICAI (2016). When aid relationships change: DFID’s approach to managing exit and transition in its development partnerships. [online] Independent Commission for Aid Impact. Available at: https://icai.independent.gov.uk/html-version/transition/

[17] ICAI (2018). ICAI follow-up review of 2016-17 reports. [online] Independent Commission for Aid Impact. Available at: https://www.google.com/url?q=https://icai.independent.gov.uk/report/follow-up-2016-17/&sa=D&source=editors&ust=1621593735312000&usg=AOvVaw09VoiL0lb5tUE-uZsMPyMS

[18] Department for International Development (2019). UK to host Gavi pledging conference in 2020. [online] GOV.UK. Available at: https://www.gov.uk/government/news/uk-to-host-gavi-pledging-conference-in-2020

[19] ​​Gavi, the Vaccine Alliance (2016). About our Alliance. [online] Gavi.org. Available at: https://www.gavi.org/our-alliance/about.

[20] ACTION Global Health Advocacy Partnership (2017). Progress in Peril? The Changing Landscape of Global Health Financing. [online] ACTION.org. Available at: https://www.action.org/resources/progress-in-peril-the-changing-landscape-of-global-health-financing1

[21] Calleja and Prizzon (2021). Moving away from aid: The experience of Botswana. Available at: https://www.econstor.eu/bitstream/10419/216991/1/1693614154.pdf