Developing a Methodology for Assessing Aid Effectiveness: An Options Paper

This paper proposes four possible approaches to developing aid effectiveness measures. It describes each of these measures and uses a range of criteria to assess them. The criteria used to assess each approach include practicality, innovation, advocacy value and estimated cost. The different approaches that the paper examines include:

• Taking the Paris Declaration on Aid Effectiveness as a starting point to develop a list of factors that could be assessed to develop a measure of donor effectiveness;
• Focusing on internal policies and procedures of each donor agency in order to understand how well they adapt their approach to different contexts;
• Debt Finance International approach, which comprises an objective framework to analyze donor policies and procedures and develop an internal ranking of donors;
• Investigating regulations that enhance or constrain business activity and ranking countries accordingly.

The paper states that each of these individual approaches suffers from being a partial measure of aid effectiveness. In order to strengthen their validity, they require extensive in-country research. The paper, therefore, advocates a combined approach that includes the most important factors and does not require in-country research.