an initiative by SEEK Development
Partner Perspective
0 min read
Written by
Annalisa Prizzon
Published on
July 19, 2019
By Annalisa Prizzon, ODI
The Donor Tracker focuses on how to support more effective development policy and spending—but what happens when developing countries move away from development assistance? Surprisingly, few donors have policies to manage the exit from bilateral country programs. This creates the risk of setbacks to progress supported by development assistance. Here, the Overseas Development Institute (ODI), the UK’s leading independent think tank on development issues, examines how donors can best manage their transition and exit from bilateral assistance programs.
As developing countries become richer and address their own development challenges without external support, development partners usually reconsider their programming and interventions. Transition and exit from bilateral development cooperation programs should rightfully be celebrated as an indicator of success in economic and social development.
However, moving away from low-income country (LIC) status can result in falling development assistance flows as resources are reprioritised towards low-income and fragile countries. Tax revenues do not necessarily increase to fill the gap. Understanding what should be prioritized (and how) when donors start closing their development programs is essential to prevent_—to the extent possible—_any foreseeable setbacks.
However, we know little about how donors’ engagement evolves when recipients are reclassified as lower-middle income countries (LMICs) and/or exit from bilateral assistance. We also lack information on how the process is managed and communicated to prevent jeopardizing development results.
For example, what are the criteria donors use when deciding which countries to continue to support? How do terms and conditions of development finance evolve during transition and exit from bilateral development cooperation programs? What principles should donors apply when considering the transition away from bilateral assistance programs? These are three of the questions addressed in a recent ODI study, Exit from aid: an analysis of donor experiences.
Our research aimed to provide an evidence-base to inform decision-making by analyzing the approaches and principles (where relevant) of 10 bilateral donors: Australia, Denmark, France, Germany, Japan, South Korea, Sweden, Switzerland, the UK, and the US; we also looked at the EU. We examined policy and evaluation documents and spoke with current and former senior civil servants and experts from each donor.
We selected the group to cover a range of donors whose development initiatives have either been cut or expanded in eight recipient countries. These recipients are analysed in a companion paper which reviews the exit and transition process from the viewpoint of recipient country governments.
We found that, broadly speaking, donors apply three main approaches to transition (see Figure 1):
From the review of these donor country studies, we identified four lessons on how to improve management of the transition away from development assistance and exit from bilateral programs:
Development partners that do not have formalized criteria or approaches to transition from bilateral development programs likely benefit from having greater flexibility, as they can handle each situation on a case-by-case basis.
However, general principles should be established to ensure processes are planned and are predictable, especially for recipient country governments. Chiefly, withdrawal should be planned thoroughly, communicated across government, and coordinated with other development partners. The same goes for new strategic directions for bilateral relations beyond development cooperation.
Putting the roadmap in place for an effective transition process is essential to prevent_—to the extent possible—_any foreseeable setbacks and to promote sustainable development.
Have a question? Contact me on Twitter at @aprizzon.
The views and opinions expressed in this Partner Perspective are those of the authors and do not necessarily reflect the position of the Donor Tracker. Through Partner Perspective pieces, we hope to bring Donor Tracker users a range of viewpoints on critical issues in global development.
Annalisa Prizzon
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