Let's say, hypothetically speaking, that you're the newly elected leader of one of the least developed countries in the world and you are trying to prioritize your government's spending on development projects and social issues. In fact, let's say that you are the incoming president of Guinea-Bissau, a West African country just south of Senegal with a population of 1.6 million and an estimated GDP per capita of somewhere between $500 – $1000. Your entire country's GDP is just $1.72 billion and, as of 2002, an estimated 40% of that money comes directly from foreign aid agencies. The United Nations has given US$ 18.3 million to supplement government salaries, Portugal has pledged 42 million euros in aid over the next three years. Japan has granted US$9.6 million in financial aid to help achieve a literacy program. And that's all small change compared to the substantial funding that comes from USAID, DFID, the European Commission, and the World Bank.
As the incoming president you are aware of the issues facing your country. The agricultural sector needs to be industrialized to boost productivity. Greater security must be put into place for infrastructural projects to continue unimpeded. Technical and scientific education must improve to raise a generation of engineers who can exploit the country's offshore oil reserves. The country's health system must improve to raise life expectancy above 50 years, and to contribute to a more productive work force. What you are not aware of – what, in fact, there is no way for you to track – is exactly how much money is pouring into your country from donors, where it goes, and how effective its impact has been. This information is unavailable because donors are notoriously opaque about their funding even while they push for greater transparency in the countries where they work.
In an excellent three-page policy briefing titled “Greater aid transparency: crucial for aid effectiveness,” Sam Moon and Tim Williamson show how a lack of aid transparency can reduce the ability of taxpayers to hold their governments accountable because it is unclear which projects are government-funded and which are donor-funded. A lack of aid transparency also leads to a lack of government budget transparency, the authors argue. “Without transparency, discrepancies between aid received and aid spent is hard to measure, and corruption is harder to track and eliminate.” It was this basic fact that led Peter Eigen to leave his position as the director of the World Bank Office for East Africa and found Transparency International:
A lack of aid transparency also impedes collaboration among grantee projects. In our mapping of “technology for transparency” case studies we came across several projects that were funded by the same donor, but were unaware of the existence of each other until we made the introduction. A simple list of grantee projects by region and topic would go a long way toward encouraging collaboration and preventing duplication.
Lastly, there is a moral argument behind the idea that funders aiming to promote more accountability through transparency should also encourage greater accountability of their own work by publishing more information about their spending and activities.
Lack of Information Leads to Misinformation
The inability of national governments to take stock of the incoming flow of aid money into their countries is just one of the negative consequences that arise from the lack of aid transparency; it also leads to misinformation about the amount and effectiveness of philanthropy and aid development. According to a survey by the Borgen Project, Americans guess, on average, that 24% of our federal budget goes to development assistance. In fact, it is less than one percent. That is about 25 cents per day for each American. Furthermore, less than half of aid from the United States goes to the poorest countries; the largest recipients are strategic allies such as Egypt, Israel, Russia, Pakistan, Afghanistan and Iraq.
Such misinformation about how – and how much – development assistance is used has contributed to a popular backlash, led in the mainstream media by Dambisa Moyo and Bill Easterly. At the first – and regrettably only – TED Africa conference in 2007, the “Cheetah Generation” of young African leaders called for “trade not aid” to increase Africa's development. Popular rhetoric says that billions of dollars in development assistance have not accomplished a thing, especially in Sub-Saharan Africa. But such hyperbole depends on the fact that we simply don't know where aid money goes, how it is spent, and what the results are. Such information tends to stay in the filing cabinets of each individual funder. We simply can't measure aid effectiveness without aid transparency.
Working Toward Aid Transparency
The good news: we have reached the point where there is clear agreement that we need to work toward greater aid transparency. The challenge and disagreement now lie in how. For example, what is the ideal level of granularity for financial information regarding grants? Does publishing the salaries of individual employees violate their privacy? How timely should information be made available? What format should it be published in? How is information across various funders easily accessed, aggregated, and understood? What are the most efficient processes to integrate the publication of information with accounting from the funder's side and budgeting from the recipient country's side? Should future budget information be made available in addition to past investments and current spending?
These are difficult questions and their difficulty probably lies more in how each institution manages their record keeping than ideological differences related to privacy and power. Fortunately, a number of new initiatives are underway to help develop standards around aid transparency. Foremost among them is the International Aid Transparency Initiative (IATI), a “temporary coalition of donor governments, governments of developing countries and NGOs” that was formed at the 2008 Accra Agenda for Action, which grew out of the 2005 Paris Declaration on Aid Effectiveness. According to its website, “IATI’s role is to develop consistent and coherent international standards for the way donors report information about aid spending.” They publish a bi-monthly newsletter, which unfortunately is only available in the proprietary Microsoft Word format. Hopefully this does not reflect their thinking on how aid-related information should be published.
In November 2008 the steering committee of the International Aid Transparency Initiative began what was meant to be an 18-month process to define:
- A common, standard format and set of definitions for the publication of aid information
- A code of conduct for signatories of the initiative
According to their latest newsletter, they now aim to reach an agreement on what data should be published by July, with implementation and the agreed-upon code of conduct beginning in December.
Publish What You Fund aims to spread awareness about the importance of aid transparency, and to put pressure on the United States, the European Union, and the World Bank to meet specific transparency targets.
If all goes well the internet should be flooded with information from donors about their spending and activities by early next year. But how to manage the torrent of information? How to make sense of it? How to create mechanisms so that greater aid transparency actually leads to more accountability of grantee projects, government recipients, and the funders themselves?
The Role of Technology in Aid Transparency
Some innovative projects have already been developed to help visualize development assistance. The Ujima Project takes data from USAspending.gov, the United States Department of Justice, the US Department of State, the Global Fund to fight HIV/AIDS, tuberculosis, and malaria, and UK's Department for International Development to visualize aid flows, weapon sales, and lobbying expenses at the country level throughout Africa. It is managed by the Great Lakes Media Institute in Rwanda and the website was developed by Appfrica, a Uganda-based web development firm.
New York Times journalist Ron Nixon describing the birth and objectives of the Ujima Project at TEDx Kampala.
Aidinfo.org is a project of Development Initiatives to research the current supply of and demand for information related to aid. A recent blog post admits that several of the team's assumptions at the outset of the project have been challenged during their subsequent research, “most notably the idea that if more aid information is made available, people will use it.” They have also found that “donors publish a lot more information than some of us thought, it’s just not in a format that’s useful for most users. In particular it’s often not timely or comparable.” Most importantly, they stress that information related to “aid and other resources flowing from donor countries” needs to be linked to “the wider accountability movement in recipient countries where most stakeholders are interested in transparency of the whole budget.” In other words, from the perspective of an accountability activist in Kenya, the aid-related statistics from the Ujima Project are just one piece of a much larger puzzle. Other pieces include oversight of the Constituency Development Fund, extractive industries , and an audit of the Ministry of Finance.
Programmers working together at the Aid Information Challenge in London
That doesn't make aid transparency any less important, only more complicated. Fortunately, a burgeoning community of researchers, programmers, and activists are working together online – and offline at informal barcamps – to develop tools and techniques to overcome the many obstacles standing in the way of effective aid transparency. March and April were especially busy months for the aid transparency community. It all began on March 8 when students from the College of William & Mary, Georgetown University and George Washington University were given a preview of the AidData Portal, which launched publicly later that month. A week later the first Aid Information Challenge brought programmers and aid agencies together to think strategically about how to use open data to make aid more effective. They have linked to related projects that are already in development, and listed a set of recommendations. On March 22nd the Aid Transparency and Development Finance conference got started in Oxford, bringing together academics, think tanks, and development agencies to discuss aid transparency with a focus on data. The final day included the public launch of the AidData.org portal, the most comprehensive of its kind, and a hands-on workshop on how to use it. Two weeks later and the first UK-based Aid Information Challenge took place at the Guardian newspaper offices in London. They have listed a number of project ideas and prototypes. The Aid Information Challenge website promises future events in other countries. Last month the United Arab Emirates’ Office for the Coordination of Foreign Aid held its own training workshop on aid transparency and accountability. Around the same time the World Bank announced that it had made publicly available all of its global development and finance indicators. Other initiatives aiming to bring transparency to philanthropy and development assistance include the Latin America Donor Index, Glasspockets, and Grantsfire.
The momentum of the aid transparency movement is palpable, but without greater coordination and aggregation, so much transparency will lead to more confusion than clarity. Raw data must be presented in ways that are easy to understand, and that tie directly to accountability initiatives at the local and national level in each country. Before we overwhelm the internet with information we need to facilitate the lines of communication to make use of it.