Making Aid Transparency a Reality

With many development organizations, both government and non-government, working to introduce greater transparency—in data, policy formulation, and program assessment—it is an important time for the development community to take stock of the lessons learned by agencies that have lead in this arena.

With this in mind, Brookings and the Modernizing Foreign Assistance Network (MFAN) recently held a public discussion on aid transparency. The discussion was built around a new paper by the Millennium Challenge Corporation (MCC) setting out the organization’s experiences in implementing aid transparency.

We were fortunate to host a panel comprising the key transparency experts in four of the lead organizations—Aleem Walji (World Bank), John Adams (U.K. Department for International Development (DFID)), Theo van de Sande (Netherlands Ministry of Foreign Affairs (MinBuZa)), and Beth Tritter (MCC). For context, in the 2014 Aid Transparency Index, DFID scored second, MCC third, the World Bank seventh, and MinBuZa 19th (out of a total of 68 agencies surveyed).

The session focused on two fundamental aspects of transparency: the value proposition for transparency, and the obstacles and incentives to implementation—the “why” and “how” of aid transparency.

Why Do We Care About Aid Transparency?

The fact that transparency promotes accountability is the most common understanding as to why transparency is important. In development work there are multiple sets of stakeholders to be accountable to, including taxpayers, implementing partners, recipient country governments and citizens, and the agency itself.

Transparency facilitates donor accountability to the most immediate stakeholders by providing taxpayers with information that reveals what the agency is doing and how well it is doing it. Public oversight is most often conducted by researchers, the media, and the legislature. Several of the panelists noted that making data public provides stakeholders—they had in mind the press and parliamentarians—with information that is readily accessible and conveys how assistance is used, allowing them to better appreciate both the specifics and broader context of aid provision, and thereby creating a more supportive environment for assistance.

Increasingly, however, donors are coming to understand that they also are accountable to intended beneficiaries in recipient countries. This same information allows beneficiaries and stakeholders in recipient countries to assess the use of assistance, except that local stakeholders need a greater level of detail about project implementation.

Not only does making data available allow citizens to hold donors accountable, it provides an incentive for donor organizations to hold themselves accountable as they know that what they do and how they make decisions can be reviewed by the public.

Transparency can contribute to better decision-making. It provides information on what agencies are doing so outside experts and stakeholders are more knowledgeable and can provide better informed input. MCC, for example, makes public both the data it uses to determine country eligibility and the results from crunching that data, so anyone can use the same data to check the results and provide feedback. When implemented in a truly open fashion, outside input can produce better informed decisions.

Transparency facilitates local ownership. How can you have real local engagement and ownership of development programs if local organizations and stakeholders lack basic information? Transparency can fill this gap. It provides data and information that allows local entities to be active participants in the planning, implementation, and evaluation of assistance programs. It provides information, not just to citizens, but also to recipient ministries, which often are in the dark on development agency activities in their country.

Transparency promotes market intelligence and facilitates coordination. If all donors share their information, the development community as a whole will have a clearer understanding of what other development agencies are doing and will be able to identify what has worked and what has not worked. Coordination is almost impossible in countries that are the focus of tens of donor agencies and hundreds of projects—it is just not feasible to get all the right people in the same room and sift through all the requisite material. But, if everyone publishes timely, comprehensive data in a common format through the International Aid Transparency Initiative (IATI), anyone can learn what other donors are doing in a particular sector or region of a country. Coordination then becomes possible.

Transparency improves competition. More complete market information leads to better, fuller competition. And not just competition in the development arena, but also in the broader marketplace as it provides the private sector with data and information it can deploy in its business operations.

What does all this add up to? More effective use of assistance resources—a goal towards which we all should be striving.

Overcoming Obstacles to Greater Transparency

The discussion of obstacles and incentives to aid transparency focused on political will and organizational culture, reporting systems and technology and software, and costs.

All participants agreed that political leadership was critical to their organizations moving ahead on aid transparency. In each case there was political leadership of the highest order, in one case from the head of state, and for all organizations from the agency head. 

While political leadership is essential, it is not sufficient. It must be accompanied by a supportive culture in the organization. It is imperative that the internal audience understands and owns the use of the data—if they do not appreciate that the data and its public availability can be of benefit to them, they will not support transparency. The natural state of bureaucracies is to “hug” data—keep it internal. It is natural for bureaucracies to be fearful of revealing data and information—fearful it will be used by the media and parliamentarians to expose weaknesses. It is essential to (i) overcome this fear, and (ii) demonstrate that the data is useful for agency program management. Overcoming the fear requires leaders who are willing to risk making data public. In the case of the three bilateral agencies represented at the event, the fear dissipated once data was released, including in the case of the MCC evaluations that revealed mixed results. To quote one of the panelists, “the silence was deafening.”

Reporting systems and technology and software to integrate financial and program data are always an issue. But the clear message from the experience of these four organizations is these issues can be difficult but by no means insurmountable, so long as there is strong political leadership and a supportive culture in the organization. An important instrument for overcoming systems and technology hurdles, and at the same time for building a supportive bureaucratic culture, is to ensure that the issues are tackled and solutions found through a team approach that includes experts from the program side who use and analyze data, the data crunchers, and the technology experts. Working together they come to understand the value and role of each party and build an understanding of the value of aid transparency.

In fact, the DFID participant on the panel offered up the DFID transparency tool to anyone who wanted to use it. That is a generous offer that other agencies should consider as a way to build on the DFID experience and knowledge.

A key challenge frequently raised is the potential cost of aligning systems and upgrading technology and software to be able to publish agency data to IATI. Interestingly, when the question was put to the panel, the response was that the cost to implement transparency was minimal to modest, not huge. 

The Need for More Political Will

The bottom line for these experienced practitioners of open data is that political will and leadership are critical to transparency efforts, as is the need to foster a culture of collaborative data use. In looking at the principal U.S. government agencies involved in providing assistance, MCC was fortunate to have had transparency built into its founding structure and strong political leadership on transparency, which the new head of PEPFAR (President’s Emergency Plan for AIDS Relief) is now bringing to that program.

There has been good leadership at the highest political level—President Obama has been very clear and articulate on government transparency, and the White House and Office of Management and Budget have issued several directives mandating open data. But evidence of political will and leadership from other U.S. agencies has been worryingly scarce. Until that happens—and the Quadrennial Diplomacy and Development Review offers the most immediate opportunity—those agencies will continue to muddle along on aid transparency.