New research comparing aid efficiency across donors
A new study published by New York University reveals that multilateral development aid donors such as the World Bank and the European Commission spend far more on overheads than individual country donors. The study, entitled “Fixing Failed Foreign Aid: Can Agency Practices Improve?”, notes that in 2008, multilateral donors spent three times more of their aid on overhead costs than bilateral donors and five times on salaries.
The lowest spenders on salary and overhead costs, proportionally, were Norway, Germany, Japan, the Netherlands and Australia. The UN agencies WFP, UNDP, UNFPA, the UN Refugee Agency (UNHCR), and the Global Environment Fund (GEF) were the highest spenders out of all 42 donors studied.
However, aid analyst Karin Christiansen, head of the NGO Publish What You Fund, warns that these numbers do not tell the full story. Because UN agencies are practitioners of aid, not just donors, their costs cannot fairly be compared in this way.
The author of the paper, Claudia Williamson, lists the ‘best’ and ‘worst’ donor in terms of their aid effectiveness. “The best overall bilateral agency is Japan. Japan is extremely efficient at disperses its aid minimizing overhead costs by dispersing a large amount of aid per employee and maintaining a low salary/benefit ratio. Japan also does not tie very much of its aid, give food aid, or support corrupt countries. Japan is also relatively transparent fully reporting to both OECD and AidData”, she writes.
She continues: “The best multilateral is Nordic Development Fund dispersing over $10 million US dollars per employee, giving over 80 percent to low income countries, and concentrating its aid by sector. The worst bilateral agency is Greece. Greece is not nearly as transparent as the other agencies. It does not report on the number of staff or its salaries and benefits, even after several rounds of emails requesting this information. Greece scores poorly on selectivity dispersing 87 percent to corrupt countries and less than 12 percent to low income countries.”
The worst multilateral donor, according to Williamson, is UNHCR, which “is not nearly as transparent as other agencies, has extremely high overhead costs, fragments its aid among many different countries, and gives only 24 percent of aid to low-income countries.”
Read Williamson’s paper at: http://data.irtheoryandpractice.org/~oxford/papers/Williamson_2010.pdf
Source:
