adf

TABLE OF CONTENTS ACRONYMS AND ABBREVIATIONS ....................................................................................................I ACKNOWLEDGEMENTS......................................................................................................................III 1.

MEASURING THE COSTS OF INEFFECTIVE AID..................................................................8 1.1 DEFINITIONS OF TRANSACTION AND ADMINISTRATIVE COSTS.....................................8 1.2 THE BASIS FOR THE STUDY'S PROJECTIONS: EU DEVELOPMENT ASSISTANCE .......8 1.3 MEASURING COSTS: SOME METHODOLOGICAL ISSUES.................................................9 2.

IDENTIFICATION OF COSTS.................................................................................................14 2.1 COUNTRY LEVEL DONOR PROLIFERATION - TOO MANY DONORS PER COUNTRY..14 2.2 SECTOR-LEVEL PROLIFERATION - TOO MANY DONORS PER SECTOR.......................24 2.3 FRAGMENTATION OF AID ACTIVITIES ...............................................................................27 2.4 COSTS OF TIED AID ..............................................................................................................29 2.5 AID VOLATILITY AND PREDICTABILITY .............................................................................31 2.6 COUNTRY SYSTEMS AND GOVERNMENT OWNERSHIP ..................................................34 2.7 MANAGING FOR RESULTS AND LESS CONDITIONALITY................................................40 3.

SPECIFIC EUROPEAN EXAMPLES ......................................................................................42 3.1 CASE STUDY NO. 1: CAMBODIA .........................................................................................42 3.1.1 Introduction ...............................................................................................................42 3.1.2 AE Progress...............................................................................................................43 3.1.3 The Cambodia Project Portfolio ..............................................................................44 3.1.4 Projected ODA for Cambodia ..................................................................................46 3.1.5 The Costs of the Technical Working Groups (and CDC) ......................................47 3.1.6 Field office costs.......................................................................................................48 3.1.7 The Costs of preparing a Country Cooperation Strategy .....................................49 3.1.8 The Costs of preparing a Programme/ Project ......................................................49 3.1.9 The Benefits of a European Approach - Conclusions...........................................51 3.2 CASE STUDY NO. 2: ETHIOPIA ...........................................................................................52 3.2.1 Introduction ...............................................................................................................52 3.2.2 Donor proliferation in Ethiopia ................................................................................52 3.2.3 Aid Fragmentation in Ethiopia.................................................................................53 3.2.4 A better European allocation of resources. ...........................................................54 3.2.5 Ethiopia and the Paris Declaration..........................................................................56 3.2.6 Conclusions...............................................................................................................58 3.3 CASE STUDY NO. 3: MOZAMBIQUE ....................................................................................58 3.3.1 EU donor proliferation..............................................................................................59 3.3.2 Sector proliferation is high even when sectors are narrowly defined ................60 3.3.3 Project number and size in Mozambique ...............................................................62 3.3.4 Despite progress, the project approach still dominates.......................................62 3.3.5 The use of budget support is undermined by donor proliferation ......................63 3.3.6 Unpredictability has serious macro-economic consequences for Mozambique ....................................................................................................................................64 3.3.7 Conclusion.................................................................................................................64 4.

EXTRAPOLATION OF COSTS TO EU LEVEL ......................................................................66 4.1 COUNTRY LEVEL DONOR PROLIFERATION......................................................................66 4.1.1 Duplication of Country Strategy Processes – Joint Multi-annual programming66 4.1.2 Duplication of Country Offices/representations....................................................67 4.1.3 Duplication of Missions and Studies ......................................................................67 4.2 SECTOR LEVEL DONOR PROLIFERATION.........................................................................67 4.3 FRAGMENTATION OF AID ACTIVITIES ...............................................................................68 4.3.1 Project preparation costs.........................................................................................68 4.3.2 Project implementation costs..................................................................................68 4.4 TIED AID..................................................................................................................................68 4.5 AID VOLATILITY/LACK OF PREDICTABILITY.....................................................................69 4.6 COUNTRY SYSTEMS, GOVERNMENT OWNERSHIP AND CONDITIONALITY .................69 4.7 SUMMARY OF COSTS AND POTENTIAL SAVINGS ...........................................................70 5.

SUMMARY AND CONCLUSIONS ..........................................................................................71