DFID, as part of its review of spending has launched a review of its multilateral aid spend.
Is the UK taxpayer getting value for money from 30 or so global organisations? Let's look at some of the potential criteria.
Transactions costs. Channeling money through multilateral aid agencies may reduce transactions costs for recipients and for bilateral donors. But on the ground, countries still have to deal with 30 or so bilateral donors and 30 or so multilaterals. In addition the UK taxpayer may simply be paying two sets of administrators--in the UK to get the money out and in Washington, Rome and New York to allocate the money.
Ownership. Can multilaterals support government systems better than direct budget support? I'm not sure. And I'm not even sure the best way to find out-who to ask? Civil society in the South? Recipient Governments? The new Aid Watchdog?
Impact. It is harder to demonstrate to donor citizens that their taxes are having a particular effect when resources are pooled in multilaterals. Interesting to note that the main point made by the International Development Select Committee when they reviewed the DFID-World Bank relationship in 2008 was that the World Bank needed to do better on making impact a central part of how it measured its effectiveness.
Credibility. This depends on governance and representation. While the heads of multilateral agencies bypass standard human resource best practice (job and person description, open competition, selected on merit by internals and externals) it is hard for these agencies to lecture on governance. On representation, change seems to be happening very slowly.
It seems to me that the multilateral agencies should prioritise their efforts on things that the bilaterals cannot do or at least cannot do as well. This means focusing more on:
* dealing with collective action failures around climate, trade and security--all the while making sure that they are fair and focus on poverty reduction
* setting norms for our collective visioning about the kind of word we want to live in
* setting standards that promote sustainable and equitable growth
* developing data sources and methods that allow us to measure and monitor the things we really care about
* being highly alert about and responsive to disasters
Perhaps the multilateral review can incentivise some movement along these lines.
There are lots of people out there who are much more knowledgeable than I am on these global public goods issues. I would love to hear from you.