Next steps in aid transparency a game changer?

I’m quoted in a blog post at the Economist today about aid transparency:

Ms Greening’s strategy is the requirement that any organisation receiving DfID funds publish clear information about where the money is going. This far-reaching transparency initiative is potentially a “game-changer”, says Owen Barder, a senior fellow and director for Europe at the Center for Global Development, a Washington, DC-based think tank.

Here is the full thing.

Britain’s foreign aid

Follow the money

Nov 28th 2012, 21:58 by S.L.

BRITAIN’S Department for International Development (DfID) is widely regarded as a trend-setter in the aid business. Under Andrew Mitchell, the agency tightened spending, cut the number of countries receiving aid and ceased funding United Nations agencies for housing and economic development that it determined were not delivering. Now its new head, Justine Greening, wants to make the country’s aid-giving more transparent. This should make it more effective. But Ms Greening’s efforts may also end up embarrassing both the department and the recipients of its aid.

In a manifesto published in the Guardian, Ms Greening outlined her plans for the agency. For starters, she notes that in 2013 the government will for the first time meet its pledge to spend 0.7% of the country’s gross national income on development. But the most significant part of Ms Greening’s strategy is the requirement that any organisation receiving DfID funds publish clear information about where the money is going. This far-reaching transparency initiative is potentially a “game-changer”, says Owen Barder, a senior fellow and director for Europe at the Center for Global Development, a Washington, DC-based think tank.

The transparency requirement, which will be phased in over an unspecified time period, appears to mean that NGOs, private contractors and possibly even governments that receive DfID funds would have to publicly disclose how they spend the money. The current DfID disclosures only show the money flowing outwards, but don’t shed light on where the funds end up. Currently, said Mr Barder, it is nearly impossible for anybody to figure out what aid money is actually being spent on.

The new initiative could really make governments and aid agencies accountable, said Mr Barder. “The idea that you can follow the money is a game changer.” By contrast, he notes, foreign-aid spending from America is divided between more than two dozen agencies and is virtually impossible to track. “Nobody across the system currently knows how much is going anywhere. At the moment it is a complete mess”, he said. “Whether you are an aid enthusiast or an aid skeptic, transparency is effective.”