Supply vs. Demand in Aid Transparency and Accountability

This week, the Transparency and Accountability Initiative released their new website, along with a report on transparency and accountability in development assistance. The report, entitled “Donor aid: new frontiers in Transparency and Accountability,” assesses progress made by donors in supplying information on their development aid flows, and calls for increased “demand” for aid information on behalf of recipient governments. The breadth of the report is impressive, covering where aid transparency has been, where it is now, and where it needs to go in the future. 
 
According to the report, a lack of transparency and accountability causes three types of problems: efficiency (funds get lost through corruption and inefficiency), effectiveness (donors can’t coordinate, recipients can’t plan ahead, and beneficiaries can’t give feedback), and empowerment (intended beneficiaries can’t play a role in the development process). These problems are well-known, and donors and international initiatives have tried to tackle them since the 2005 Paris High-Level Forum on Aid Effectiveness. 
 
But progress has been slow, says the report, due to the lack of coordination between the “supply” and “demand” sides of aid information. Whereas donors have increasingly taken the initiative to supply aid information, there are few forums that bring together actors from both the North and the South to independently evaluate donors based on the data they provide. “Transparency is ultimately about relationships,” says the report. Donors can provide as much aid data as they see fit, “but effective transparency also requires demand, in the form of effective CSOs, parliaments, researchers etc. making use of the information provided” (p. 15). Claudia Schwegmann reinforces this point in a recent blog post on the failure of transparency in farm subsidies to convert into policy change. 
 
According to the report, this is why initiatives like Reality of Aid (ROA) are so important – they use published aid information to assess donor performance (see, for example, ROA’s annual report). Linking supply and demand for aid information is also AidData’s primary motivation for creating the Development Loop application, a prototype tool that provides community beneficiaries a convenient way to give direct feedback on development aid projects. 
 
But, as the report emphasizes, there are still many missing pieces, including civil society initiatives, particularly in the South, that know how to use open data to their advantage and governing bodies that take feedback seriously. According to Schwegmann, only a fraction of any population will be interested in providing feedback on open data, which requires significant time and energy. Any feedback given needs to be efficient and understandable, and it needs to reach decision-makers who are incentivized to take action. Crowdsourcing platforms like Ushahidi are a great way to collect and aggregate information, but policy-makers need to be receptive to the data they receive – they need to institutionalize feedback in their policy-making procedures. 
 
It is important to recognize the significant constraints that donors face in making their data public, which the report carefully outlines on pages 25-26. But the International Aid Transparency Initiative (IATI) offers real hope for concrete progress on these issues. Because IATI has incorporated input from donor agencies, recipient governments, civil society organizations, foundations, and research initiatives, its aid reporting standard appeals to a multi-stakeholder base. With a common standard for aid information reporting that is useful for all types of end users, paired with timely, comprehensive data from donors, we may eventually see a stronger connection between the “supply” of transparency and the “demand” for accountability.