Next steps: Paris Declaration on Aid Effectiveness - (DAC News April-May 2005)

Over one hundred donor and developing countries signed up to the Paris Declaration on Aid Effectiveness at the High Level Forum in Paris on March 2.

In doing so, they agreed for the first time to measure their success at making aid more effective, with a set of indicators and targets.

This moved the aid effectiveness agenda beyond the general consensus reached at Rome in 2003 to what is now a  practical blueprint for donors and developing countries to monitor each others progress.

It was a memorable moment: now some of the wealthiest and poorest countries from across the world have signed up to some fifty commitments to do aid better.

Donor countries, for example, have agreed to base any conditions on aid to developing countries, on that country's own Poverty Reduction Strategy (PRS). Other conditions would be included only when a sound justification existed. In turn, developing countries with the assistance of donors, agreed to reform national systems wherever necessary to improve their capacity to manage development resources.

There was, of course heated debate over setting realistic targets. But the discussion was ultimately constructive. It was agreed that targets for all indicators but one (that is untying aid where continued progress is expected) would be set in time for the September 2005 UN General Assembly. In the mean time, tentative targets were agreed in Paris for five of the indicators.

For example preliminary agreement was reached, that by 2010, 85 per cent of aid going to developing countries will show up in developing country budgets. This will make it transparent that the aid is aligned to poverty reduction priorities.

Work is now being carried out through the Secretariat of the OECD DAC (Development Assistance Committee) to develop baseline proxies so that further targets can be agreed on in time for the United Nations Summit.

The outcome of this work will be reviewed by the Working Party on Aid Effectiveness which is a partnership of donors and developing countries hosted by the OECD DAC. It is made up of twenty-three bilateral donors, fourteen developing countries and officials from the World Bank, IMF, United Nations agencies and Regional Development Banks. It will next meet in May.

Updates to the Paris Declaration will be posted on the DAC website when available.