Wanted: Better Sector-Level Aid Data

This is a joint post with Denizhan Duran.One of the few things donors agreed on at the High Level Forum on Aid Effectiveness in Busan was the need for increased transparency: better aid data is needed to help donors channel their aid more effectively and recipient countries hold their donors accountable. Yet despite the shared commitment, data on aid flows remains incomplete, complicated and fragmented, particularly at the sector level.As we built an index on health aid effectiveness - "QuODA Health", there were many aspects of aid effectiveness that could not be quantified, and various irregularities that were difficult to explain.First, the OECD’s Paris Declaration survey does not include sector-level reports on harmonization, predictability and coordination. Information on the extent of budget support and sector-wide approaches, two key strategies thought to be important to reduce administrative burden on recipients, is not provided. The International Health Partnership + Results process (here) attempts to fill this gap by running its own survey, but most donors and recipients do not yet participate in this process run by a consortium of non-governmental agencies. Further, information on private donors is not available from the OECD DAC process and was only systematized by the Institute for Health Metrics and Evaluation (IHME), although their database does not go beyond aggregate numbers.Quality of data is also an issue. Donor governments use OECD guidance to report to the Creditor Reporting System (CRS) database, providing details for each of their projects. While the CRS is a valuable resource – and is the main source for other databases such as AidData – its reporting directives do not always align with best practices in aid effectiveness.Consider the reporting of untied aid, which allows for procuring goods and services from “substantially all countries” and is said to increase aid effectiveness via ensuring lower prices and allowing for local procurement. However, this document, which is cited as the directive for reporting to the CRS, states that aid can be classified as untied even if it allows for the purchasing of goods and services from OECD member countries, which defeats the purpose of untied aid in terms of empowering local industries. This is why our analysis shows that only 4% of U.S. health aid is tied, while USAID only recently started moving towards procurement from local agencies.Another issue is that CRS purpose codes remain too broad to track expenditures into most specific diseases or area: the largest category in health is “basic health services,” and other than HIV/AIDS, malaria and tuberculosis, purpose codes remain too broad to track money that goes into any other disease, or general budget support. Chopping down purpose codes into finer slices would allow for a better way to see if health aid tracks to recipient country priorities.We believe that better health aid data will lead to better aid, and hopefully better results. There are easy and relatively low-cost ways to increase the scale and scope of reporting: donor reporting to the CRS can be monitored and verified more rigorously, the IHP+ process can be expanded and perhaps integrated to the CRS reporting process through adding sector-level questions to the Paris Declaration survey, and private sector donors can be encouraged to report publicly according to CRS standards. All donors should report according to IATI standards, which presents a better typology, allowing for analysis of budget support and policy significance.What was left out of QuODA Health may be as relevant as what was included; better data and more transparent reporting would help to determine if that is the case. In the meantime, the 2010 version of the CRS database was recently released, and we will reissue QuODA Health with updated data.