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global priorities
  poverty & development

Donor anti-corruption policies

Aid harmonisation and aid effectiveness

The Rome Declaration on Harmonization (2003)
In Rome all multilateral and bilateral institutions agreed to harmonise donor procedures in view of growing evidence that, over time, the totality and wide variety of donor requirements and processes for preparing, delivering and monitoring aid had generated unproductive transaction costs.

The Paris Declaration on Aid Effectiveness: Ownership, Harmonisation, Alignment, Results and Mutual Accountability (2005)
In a follow up to the Rome meeting, OECD donors met in Paris in March 2005. The final declaration focuses on the effectiveness of aid. It states among other things that

“A major priority for partner countries and donors is to enhance mutual accountability and transparency in the use of development resources.”

See more information on http://www.aidharmonisation.org/

Donor anti-corruption policies

Most donors have adopted specific anti-corruption policies to guide their development co-operation work. Poverty reduction strategies increasingly take corruption into account. The World Bank began to address corruption in the mid-1990s. Other donors followed suit. Still there are critical voices arguing that donor support for anti-corruption strategies and reforms do not actually meet the needs.

The Development Assistance Committee (DAC) of the Organisation for Economic Cooperation and Development (OECD) has initiated work on lessons learnt by donors in the practice of fighting corruption. Enhanced effectiveness in fighting corruption is a priority.

OECD-DAC and TI jointly organised the DAC Partnership Forum on “Improving donor effectiveness in combating corruption 9-10 December 2004”. One major conclusion from the Forum was that there is a broad consensus on the need for increased dialogue and cooperation among donors and aid recipients to improve donor effectiveness in combating corruption. Throughout the Forum it was noted that corruption affects every sector, every bureaucracy, in every country. Increased horizontal cooperation among donors, with other sectors of government and the private sector was seen as essential for fighting corruption. In strengthening the demand for accountability, parliaments and civil society were identified as having pivotal roles to play.

Donor anti-corruption policies normally embrace the following four levels of activities. The levels are often interrelated and overlap:

  • Ethics and integrity in the agency’s own organisation, departments or embassies
  • Measures to safeguard the use of development cooperation funds in projects and programmes
  • Strategic contributions to counteract and prevent corruption in partner countries
  • Participation in global anti-corruption work and international cooperation.
 

Conditionality

Conditionality of aid is generally associated with loans from IMF and the World Bank. Bilateral donors have added their own conditions to these programmes. During the last decades deregulation and privatisation of public services such as water, telecommunication and electricity typically were part of loan conditionality agreements. However, privatisation has in several instances resulted in an increase of corruption. The necessary regulatory framework has not been in place. The British aid agency DFID in 2005 officially declared that conditionality is part of the past and that a good aid partnership is based on an open dialogue, with rights and responsibilities on both sides.


TI Working Paper:
Poverty and Corruption