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CGD’s research on aid effectiveness focuses on the policies and practices of bilateral and multilateral donors. Combining strong research credentials and high-level government experience, our experts analyze existing programs, monitor donor innovations, and design innovative approaches to deliver more effective aid. CGD research also provides insight into how policies ranging from trade to migration to investment undermine or complement foreign aid policies.
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In outlining his vision for U.S. development assistance, US Agency for International Development (USAID) Administrator Mark Green has emphasized fidelity to an overarching purpose—ending its need to exist. Consistent with this objective, USAID has been developing a new strategic approach that seeks to more systematically orient its programming toward building countries’ capacity to plan, finance, and manage their own development. A key component of this “journey to self-reliance” framework is a set of metrics that will help assess each country’s progress along their journey. The metrics will help inform strategic planning around the nature of USAID’s partnership with the country, shape development dialogue, and help inform thinking about strategic transitions.
In Navigation by Judgment, Dan Honig argues that high-quality implementation of foreign aid programs often requires contextual information that cannot be seen by those in distant headquarters. Tight controls and a focus on reaching pre-set measurable targets often prevent front-line workers from using skill, local knowledge, and creativity to solve problems in ways that maximize the impact of foreign aid.
Given the changing global landscape, development finance – rather than aid – is poised to be the future of development. The spotlight is increasingly on Development Finance Institutions (DFIs) to be catalysts in mobilizing needed financing. At a time when their record on development finance mobilization and development impact is still debated, they are nevertheless being asked to play a critical role in helping to fill huge financing gaps associated with meeting the SDGs. Several countries have established new DFIs and others are considering expanding DFI operations.
Even for countries that are far away from graduating from foreign aid, the importance of domestic resource mobilization for maintaining macroeconomic stability and sustained economic growth is well documented. A look at the experience of countries that have received HIPC debt relief validates this point and underlines the need for attaching a high priority to tax policies and practices in international assistance programs for low income countries.