The TRACK principles

FIVE PRINCIPLES THAT MAKE FOR A GOOD PROMISE

INTRODUCTION

In recent years there have been repeated calls for increased commitments by donors towards development assistance and especially for increased resources for specific initiatives around achieving the internationally agreed Millennium Development Goals. There have also been calls for resources for such items as adaptation and mitigation financing to help the poorest countries deal with climate change. To deal with these major global challenges requires both large sums of money, effectively applied, and more often than not, co-ordinated international efforts. In response to these public calls, the G8 countries in particular and OECD nations more generally have made a series of impressive commitments towards fighting poverty and climate change. However, too often the details of these promises have been extremely vague, making accountability difficult. These major challenges are too important to be left to excessive interpretation: they should be crystal clear and easy to monitor. Recent examples of welcome but vague promises include: the $20bn for agriculture/food security committed at the 2009 L’Aquila G8 Summit; the $100bn promised for climate finance in at the Copenhagen climate summit in December 2009; the $50b increase in global ODA promised at the Gleneagles G8 in 2005 (of which $25bn of the increase was for Africa); the $60bn for health ODA promised at the Heiligendamm G8 Summit. (1)

This briefing suggests five key principles which should be applied to any financial promise made by a policy maker. The briefing is aimed at those responsible for making the promises in government, as well as those judging the quality of the promises in the media and civil society.

It is the view of the organisations who have signed up to these principles that all too often large promises are made but with resources that are already committed or double counted. A repeated pattern of this kind will induce (and arguably is already inducing) increasing cynicism amongst the public about global policy makers just when trust needs to be restored. Adherence to a few key principles – to be enshrined in a ‘charter for good promises’ would be a key step in the right direction. We would like to see a position in the future where bold promises are still clearly encouraged, and warmly welcomed, but when policymakers announce a large number in response to a serious global challenge, the media and civil society will ask – does this welcome commitment meet the TRACK principles of the “charter for good promises?” In other words is the promise Transparent, Results-oriented, Additional, are any Conditionalities clear, and how will we know whether it is being Kept?

This initiative is fully consistent with other moves to increase transparency, such as the Paris Declaration and Accra Agenda for Action on aid effectiveness, the International Aid Transparency Initiative and the ‘Publish What You Fund’ principles.

The five TRACK principles and the five questions to ask:-

1. IS IT TRANSPARENT?

Every numerical commitment should come with – or be swiftly followed by - a clear presentation which shows: over how many years the commitment is for; a clear deadline; which budget line item the commitment is coming from; what the initial baseline is; and how the budget line item will change in future years. Often official commitments are multiannual, and one lump sum is announced when in fact it is the sum of many individual separate annual contributions. Therefore every aid commitment should have all the key information disclosed by each donor separately about that promise. This information needs to be comprehensive, comparable and timely, and be available and accessible to the citizens of both recipient and donor countries. All this information should be available and accessible, ideally in machine readable formats, on websites and in line with the International Aid Transparency Initiative format standards.

A transparent commitment makes the flows predictable from the point of view of the recipient country, enabling them to plan properly for future flows. Without the predictability that comes from this transparency the recipient nation’s ability to plan properly is impaired if not impossible. If recipient nations can’t plan on reliable flows, the effectiveness of those development assistance flows is considerably reduced. To facilitate this process it is essential that not only are the promised financial inputs made fully public, but that they are also aligned with the recipient country’s own management and monitoring systems.

Transparency also requires clarity about presumed inflation rates and exchange rates. For example a dollar in 2005 is not worth the same as a dollar in 2010, especially if it was converted from Euros in the original calculation. The promise should therefore specify whether it is in nominal or constant prices.

2. IS IT RESULTS-ORIENTED?

Financial promises should link expenditure to real-world outcomes. In the context of official development assistance these outcomes should be set by the recipient countries. A clear presentation of desired results will help the citizens of developing countries hold their government - and the whole development industry - accountable for delivery of these results.

3. IS IT ADDITIONAL?

Perhaps the most difficult aspect of promise making, and one which makes it vulnerable to abuse, is judging whether or not any of the money promised is new and additional – something which is often demanded by activists and claimed by promise-makers. However, claims of additionality are quite slippery. If implemented adequately the first principle of transparency should take care of many of the concerns about additionality. But because of confusion about the term it is proposed that it be its own special principle.

The scope for confusion can be readily seen. For example, spending may be ‘additional to previous levels’, ‘additional to promised increases above current levels that were already previously planned’, or ‘additional for the issue in question but at the expense of other objectives within the overall budget’. New additional money for any given initiative could come either from efficiency savings, or from a reallocation from other budgets, or from an entirely new allocation into the budget as a whole – all this information should be readily accessible or a judgement about additionality will be hard to make. Overall, every promise that claims to be ‘additional’ must answer the question ‘additional to what?’

4. IS IT CONDITIONAL?

Often increases in resources are conditional upon changes in policy, both from the government and other agencies who are programming the resources, and above all from the recipient developing country implementing partner. Some conditionalities are onerous and much research has shown that conditions that impose policy choices on the recipient tend to be counterproductive. Others are important and necessary (i.e. the need for fiscal transparency and good audits and monitoring of projects). In either case, however, it is important for the conditionalities to be clear and openly presented.

5. HOW WILL WE KNOW IT’S BEEN KEPT?

As part of any major promise a mechanism should be identified, preferably an independent mechanism, to measure and monitor progress through the lifecycle of the promise to help ensure the promise is kept and performance along the way is publicised to citizens and the media. Key moments should be identified, such as the September 2010 MDG Review Summit, where public interim progress reports can be delivered. This mechanism should build on and support domestic accountability systems in the recipient countries.

NOTES

1. ONE is commissioning research on each of these promises to compare, contrast and identify challenges with the structure of each, and demonstrate how the TRACK principles might have helped make each more easily monitored.