ODI Background Notes, June 2012. Authors: Matthew Geddes
“This paper investigates how to interpret, respond to and use the evidence provided by recent donor quality indices, using the European Institutions as an example.
The debate on aid impact is longstanding and the tightening of budgets in the current financial crisis has led to a renewed focus on aid effectiveness, with the most recent iterations including three academic indices that rank the ‘quality’ of donors as well as the Multilateral Aid Review (MAR, 2011) by the UK Department for International Development (DFID).
These exercises are being used to assess donor comparative performance and foster international norms of good practice. The MAR is also being used to guide the allocation of DFID funds and identify areas of European Institution practice that DFID seeks to reform. This paper investigates how to interpret, respond to and use the evidence they provide, focusing on the European Institutions, major donors themselves and, taken together, DFIDs largest multilateral partner.
The paper presents scores for the European Institutions, reassesses this evidence and identifies issues that could make the evidence less robust, before working through several examples to see how the evidence that the indices present might best be applied in light of these criticisms.
The paper concludes that the indices’ conflicting results suggest that the highly complex problem of linking donor practices to aid impact is probably not a problem best suited to an index approach. On their own the indices are limited in what they can be used to say robustly, and together, produce a picture which is not helpful for policy-makers, especially when being used to allocate aid funding.”