ࡱ>  @ bjbj5*5* ZW@W@fxxx$///P00up11@111222ooooooo$rRgtpLB22LBLBp11/p`J`J`JLB11o`JLBo`J`Jgli11 \_*/.FngmLEp0upg'uHf'u4li'uli<27`JQ;->222pp+/J^/ ENSURING THAT AID FOR TRADE PROMOTES DEVELOPMENT: INDICATORS FOR MEASURING THE IMPACT Paper prepared for the Workshop on Monitoring and Evaluation ϲʹ High-Level Conference on Mobilizing Aid for Trade: A Global Review November 19, 2007 Geneva By Kimberly Ann Elliott* Center for Global Development Washington, DC Aid for trade can be distinguished from much other foreign assistance to developing countries in that it targets productive (tradable) sectors, the development of which can contribute to increased economic growth in the short to medium run (a few years). This is in contrast to aid that is aimed at alleviating immediate needs in a humanitarian emergencies or other crisis, or that seeks improved health and education outcomes, which contribute to peoples well-being in many ways but to growth less directly and only over the longer run. In terms of monitoring results, the further one gets from specific project outcomes, the more difficult it becomes to attribute outcomes, for example higher economic growth or employment in tradable sectors, to aid. But it is nevertheless important to monitor trends at the macro level to ensure that progress is being made on the ultimate objectives of foreign assistance. After all, increased trade and investment are means to an end, not ends in themselves. The monitoring of quantitative indicators of donor performance (dollars delivered and additionality) is not addressed here, since it was addressed in the first panel of this workshop. Qualitative monitoring of donor performance is also being addressed by others, but is discussed briefly at the end of the paper because it so essential in ensuring that aid is effective in achieving its objectives. The primary focus of this paper is on indicators that might be used to assess the results of aid for trade in recipient countries, especially in creating and expanding the capacity to produce tradable goods and services. First, however, we must have some understanding of what is meant by aid for trade in order to know what needs to be monitored. Defining Aid for Trade Foreign aid is aimed at multiple objectives, but an important one is promoting growth and reducing poverty. Aid for trade also has multiple objectives, but a principal impetus for it is rooted in the belief that trade can contribute to growth and that aid, as well as market access, is needed to promote trade in some countries. In a paper examining the debate over whether aid has contributed to growth in the past, Clemens, Radelet, and Bhavnani (2004) argue that previous analyses erred in lumping together all forms of aid and then examining the impact on growth over relatively short periods of time. In their analysis, they divide aid flows into three types: emergency and humanitarian aid, likely to be negatively correlated with growth in many cases because of the effects of conflict; aid that affects growth only over a long period of time, if at all, such as aid to support democracy, the environment, health, or education; and, aid that plausibly could stimulate growth in four years, including budget and balance of payments support, investments in infrastructure, and aid for productive sectors such as agriculture and industry. The authors results confirm that aid in the third category is associated with higher growth and that does not work only in countries that have good policies and institutions, though that helps. What is striking about the results of this analysis is that the types of aid included in the third category overlap extensively with what a broad definition of aid for trade might include. The OECD databases the authors used to classify donor flows had only five categories under support for trade at that time. The authors classified two of themsupport for wholesale and retail trade, and export promotionas short-impact aid that could increase growth, and three otherstrade policy and administrative management, multilateral trade negotiations, and trade education and trainingas potentially affecting growth only in the long run (Clemens et al., pp. A-3 to A-8). While there is still no consensus definition of aid for trade, there does appear to be an emerging consensus around the broad categories that should be included under this heading, but without any distinction between those that might contribute to short-run growth, and those aimed at capacity-building where the effects will not be seen for many years. The joint ϲʹ/OECD Trade Capacity Building Database includes three categories: Trade policy and regulations Trade development Infrastructure The ϲʹ Task Force on Aid for Trade adds three othersbuilding productive capacity, trade-related adjustment, and other trade-related needsbut without any specifics on what these categories might include. What both frameworks for categorizing types of aid leave out are developing country demands for compensation, though some of those might be covered under trade-related adjustment. An alternative framework for thinking about aid for trade starts by linking it to the source of a countrys challenges related to trade: Compensation for costs arising from liberalization by others: export revenue losses due to preference erosion higher net food import costs Adjustment assistance for costs arising from implementation of ones own liberalization: implementation of new ϲʹ rules fiscal imbalances related to tariff revenue losses dislocation (potentially including due to preference erosion) Capacity-building in tradable goods and services sectors: trade policy, including training and education for trade negotiators and officials regulatory environment hard infrastructure, especially transportation, communications soft infrastructure, including financial (credit) and logistical services These are the categories discussed below. Potential Indicators for Assessing the Results of Aid for Trade One danger in monitoring and evaluation efforts is the temptation to monitor things because they are measurable, not because they are meaningful or clearly contribute to ones ultimate objectives. A second challenge is being able to attribute results in a given area to a particular flow of foreign assistance. This is easier at the level of a specific project or program, such as assisting dislocated workers or building a road, and rigorous independent evaluations should be done at that level. But donors and recipients should also want to know whether the road is contributing to increased economic activity, including trade, and whether that activity has created jobs and reduced poverty. Those results will often take longer to emerge and be harder to attribute to aid flows. Thus it is useful to have indicators that can be used sequentially, starting with, were specific project objectives met? If so, can we subsequently observe increases in trade indicators? And if the answer is again yes, is increased trade associated with higher growth, employment, and the other indicators that we ultimately care about? Appropriate indicators will obviously vary by project and need to be adapted to conditions in particular countries. And, keeping in mind the caveat about not measuring things only because they are quantifiable, the choice of indicators will have to be driven in part by data availability. Because of limited time, there has not been an effort to determine the availability of data for the indicators suggested below, nor is the list exhaustive. Compensation and longer-term capacity-building Where compensation and, in some cases, adjustment assistance, are the objectives of aid, a direct measure of results is whether the volume of aid transferred is sufficient to cover the costs the donor and recipient want to offset. Other potential measures of effective adjustment assistance include the speed with which adjustment to changes in trade occurs and whether negative impacts on the poor are minimized. If assistance in the first category is used to promote adjustment, not just compensate losses, then some indicators in the first two categories would overlap, including whether balance of payments problems are avoided, new export sectors are developed that create jobs for those displaced and replace export revenues for products with preferred access, and whether safety nets for dislocated workers are created or strengthened. To the extent that aid can promote growth, that should also contribute to adjustment. Indicators of improvements in trade policy capacity are hard to measure and the connections to the ultimate goals of growth, job creation, and poverty reduction longer-term and hard to prove. This is also one of the areas where results that are measurable may say very little about the positive or negative effects of a given intervention. As an example from another sector, results for aid to education are often measured in terms of increased school enrollment, but if the quality of education is low, or teachers do not show up, then little has been accomplished with that aid (Barder and Birdsall 2006). Similar difficulties in the aid for trade area are illustrated by some of the performance indicators listed in a recent OECD (2007, p. 62) study: number of bilateral or regional agreements negotiated number of cases brought to ϲʹ dispute settlement body number of reforms and regulatory adjustments made number of trade research centers number of trade policy papers produced. But if the trade agreements increase rather than decrease distortions, or the ϲʹ cases or regulatory reforms are trivial, or the research papers of poor quality, then the money has been wasted, or worse. Moreover, there may be differences between donor and recipient over the merit of particular reforms or agreements. For example, results from aid intended to improve trade policy could be measured by changes in the height of a recipient countrys trade barriers (assuming that data is available), but there could still be disputes over the short-run development effects of that change, as underscored by the lengthy and ongoing debates on trade and growth. For the remaining three capacity-building categoriestrade-related regulatory reform and hard and soft infrastructurethe links to trade and employment are more direct. Aid for growth: Expanding Productive Capacity in Tradable Sectors Numerous studies find large benefits from changing policies and improving infrastructure in ways that expand the capacity of people to produce tradable goods and services, and that facilitate trade in those products. Table 1 divides potential indicators for assessing donor support for these activities into four categories: narrow, project-related measures trade costs and competitiveness measures trade and investment flows ultimate objectives, including job creation, growth, and poverty reduction. The recent evaluation of the World Banks support for trade uses a similar conceptual framework, with outputs that are similar to the immediate objectives in table 2, such as tariffs levels and disperson, customs clearance times, and increased trade financing, as indicators; outcomes, with indicators for improved trade performance similar to those in the third category; and impact on economic growth and poverty reduction, similar to the ultimate objectives in table 2 (Independent Evaluation Group 2006, p. 7). The lines between these categories are not always bright, especially for the first two categories. But the differentiation of levels of objectives is intended as a rough way of addressing the problem of attributing results to aid flows. The indicators should be used sequentially and at appropriate times, when one might reasonably expect to see results. For example, growth effects from improved port capacity might not show up for two or three years, but they should be evident in three to five, as suggested by the Clemens et al. analysis discussed above. At the project level, rigorous and independent evaluations can and should be done (see box 1). This requires specific benchmarks and baseline data against which progress can be measured. Where appropriate, for example with large infrastructure projects that may take several years to complete, intermediate benchmarks will be needed to ensure the project stays on track. After the project is completed, the nature of the monitoring will change, but it should not stop. For certain types of aid for trade, improvements in some of the objectives one tier up, such as trade costs and competitiveness, may also be relatively closely linked to the aid provided. For example reductions in the time required to import or export might reasonably be attributed to aid for trade if they follow in the wake of donor-funded infrastructure improvements or customs reform. Changes in trade flows are the expected result of aid for trade at the next level of objectives, but these occur for any number of reasons and the lags between the provision of aid and improved trade performance can be long, making attribution of this result to aid difficult. Improvements in the ultimate objectivespromoting growth, creating jobs, and reducing povertywill be even harder to trace back clearly to aid for trade. But as long as measures of these ultimate development objectives are moving in the desired direction, then donors should not be overly concerned about being able to attribute the results to aid. If the measures are not showing improvement, then closer scrutiny of the effectiveness of aid delivery and implementation, relative to other factors that affect growth, development, and poverty, is merited. Results on all the indicators and monitoring reports should all be made public and distributed widely so that citizens, NGOs, and the private sector could access them and provide feedback. Donor Performance and Aid Effectiveness The push in recent years to sharply increase the volume of aid triggered a vigorous debate over whether aid is effective. Monitoring and evaluation of the results of aid are one part of that, but improving the aid delivery mechanism itself is also important. That is not the focus of this paper, but a brief summary of some of the work done by the Center for Global Development, the OECD, and others may be useful. Donors and recipient countries have long recognized there were problems in aid delivery and, in 2005, more than 100 countries and two dozen international organizations signed on to the Paris Declaration on Aid Effectiveness at the OECD. Adherents committed to improving aid in five areas: recipient country ownership; alignment between donor support and partner country development strategies and capacity; harmonization of donor activities; results; and mutual accountability. Two subsequent OECD studies looked in more depth at how to make aid for trade more effective, while much CGD work focuses on aid effectiveness in general. The key recommendations from these studies are similar though not identical to those in the Paris Declaration, including the need to address: Country selectivity and differentiation in delivery modes, including the willingness to exit when recipient governments are not using aid effectively. Recipient participation in the development of projects and programs, including the private sector, and country ownership. Donor and project proliferation within countries, which increases administrative costs in recipient countries with limited resources. Results-based management, with clear goals and benchmarks, and independent monitoring and evaluation. Thus, there is general agreement on what needs to be done in broad terms. Critical differences remain, however, among donors and between donors and recipients over what some of these things mean in practice and how to implement them effectively. For example, Birdsall (2005) lists as the fifth of donors seven deadly sloth, in pretending that participation is sufficient for ownership. Nor has there been significant follow-through on most of the other commitments (van de Walle 2005). But donors have at least begun to experiment with new methods of delivering aid that they hope will be more effective. One such approach is to move away from pushing for reforms by attaching conditions to aid, and using pull mechanisms that reward countries that meet certain eligibility conditions or benchmarks for measuring progress in a given area. The hope is that this approach can make aid more effective by providing clear guidelines for selecting among recipients, while at the same time increasing country ownership and linking monitoring and evaluation to measurable and relevant benchmarks. At the broad country level, President George W. Bushs Millennium Challenge Account is one such example. It offers a larger than usual amount of money to countries that meet explicit criteria related to good governance and sound policies. While there were early organizational start-up and subsequent program implementation delays, the program is viewed by many in the aid community as an important innovation in effective aid delivery (Lucas 2007). Radelet (2005) agrees that the MCC is a useful innovation, but he argues that it cannot be the only approach for US aid because it would leave many of the poorest to the mercies of incompetent or rapacious governments. He suggests incorporating the MCC in a comprehensive foreign aid strategy that bases the size, type, and mechanisms for delivering aid on the governance performance of the recipient. Thus, well-governed countries would be eligible for MCC-type aid, while poorly-governed countries would not necessarily be cut off but they would receive smaller amounts of money, with less discretion in how it is used, with a larger share of the aid channeled through non-governmental organizations and targeted to providing humanitarian relief or basic services. In some cases, progress may not be possible and exit the only option. Table 2 shows Radelets schema for differentiating aid delivery methods according to the recipients level of governance. As noted at the bottom of the table, this strategy also calls for differentiated approaches to monitoring and evaluation, depending on the recipient. At a narrower, issue-specific level, payments for progress, are another idea being explored by some analysts and donors (box 2). The basic idea is that donors would provide additional aid to countries for meeting concrete measures of incremental progress, such as increases in the number of children vaccinated or finishing school. In the aid for trade area, one could envision providing payments for progress in reducing the number of days required for export, and leaving it to the country to decide whether the best way to do that is by expanding a port or reducing the number of forms required by customs agents, or both. In addition to reforms in these areas, donors also need to develop new mechanisms for providing aid regionally, particularly in sub-Saharan Africa, where key needs, such as improvements in transportation and communications infrastructure, must be coordinated regionally to be effective (Mwencha 2007). Despite a great deal of attention to the problem in recent years, relatively little progress has been made in addressing it. While donor countries and agencies have seemingly rejected creating a new fund specifically for aid for trade, a new dedicated pool of money that governments could tap, after agreeing among themselves how it would be used for regional projects, might be a useful way to move forward. Finally, just as publication of the World Banks Doing Business Report, the World Economic Forums competitiveness report, and various governance indicators put pressure on poorly performing countries to do better, regular reporting on donor performance would also be useful. The Center for Global is a pioneer in this area with the Commitment to Development Index, the first component of which measures both the quantity and quality of aid. The Center is now building on that effort with a new index focusing on the quality of aid, which could be a major contribution in improving aid effectiveness (box 3). Box 1: When will we ever learn? The importance of evaluation for improving aid Savedoff and Levine (2006) argue that knowledge about what works in aid could be increased substantially by bridging what they call the evaluation gap with more rigorous, independent evaluations of aid activities. Donors can improve understanding of what works in aid, including aid for trade, by funding evaluations that are: Independentby creating institutional firewalls between the evaluation function and the implementers of the activities being evaluated within an agency, or by funding completely independent evaluations through mechanisms such as the incipient Initiative for Independent Impact Evaluation (http://www.cgdev.org/content/article/detail/8207/). Methodologically soundby investing in gathering baseline data, for example on trade costs in a country, before aid activities start, and in rigorous statistical analysis of results. This will not work for all types of aid for trade or in all cases, but a number of the indicators proposed here, are sufficiently concrete to be measured and changes in them evaluated. This would require only a small investment up front for the evaluation, with potentially large payoffs in the future from more effective aid. --Kate Vyborny Box 2: Performance-based and Progress-based approaches in aid for trade One increasingly popular approach to increasing aid effectiveness is to link financial flows to outcomes. Under output-based or performance-based schemes, donors or governments pay contractors or service providers, which may be governments, NGOs, or private firms, more for improved performance on specified benchmarks. Evidence from the health sector suggests that these incentive-based programs can have a significant impact on results (Levine forthcoming; GPOBA 2006, 2007). Reflecting an international consensus that ownership of programs by local institutions is critical to program success, the Center is exploring how to implement a similar approach on a larger scale, called progress-based aid. This approach would use hands-off payments to governments as they document incremental progress on the ground (Barder and Birdsall 2006; Birdsall, Savedoff and Vyborny 2007). Allowing the recipient government to determine how to spend the funds would let them determine the best way to achieve the outcome that the recipient and donor both want. These two approaches would be useful in different countries and for different purposes. In aid for trade, either could be used to pay for concrete outputs, such as the length of roads builtin the right areas, number of electric connections made, or number of SPS inspections passed in the destination country, for example (see Table 2). --Kate Vyborny Box 3: Measuring Aid Quality, not just Aid Quantity The development community has reached a strong consensus, demonstrated by the Paris Declaration, that not only the quantity, but also the quality of aid play an important role in determining the effectiveness of development assistance. However, translating this donor commitment to principles into a concrete agenda for rich world and poor world advocates, governments, and the donor agencies themselves, presents a number of challenges. The debate remains disproportionately focused on targets for the quantity of aid. One of the chief obstacles to bringing quality of aid onto the broader public agenda is the lack of accessible, comparable information on the quality of aid. Qualitative and quantitative information is available through a number of sources, primarily the OECD DAC database, peer reviews, and Monitoring Paris initiative reports. However, these sources provide the information in a highly complex format, and present significant hurdles for interpretation by legislators, advocates, or the public. The Center for Global Development is in the process of developing the design for what will be an annual assessment of the quality of the aid disbursed by official donors, to help catalyze more interest in better aid, as well as more aid. This initiative builds on the model of the Centers Commitment to Development Index, which ranks rich countries on their contributions to development in aid, trade, environment, technology, security, migration, and investment; however, the new assessment will focus only on quality of foreign aid, excluding quantity as well as the other six policy areas in the overall index. The assessment will evaluate donors on a range of indicators of the quality of their aid, likely to include measures of donors policy and practice in: achieving greater value for money (by untying aid from purchases of the donors goods and services, as well as allocating funding to poor, well-governed recipients, multilaterals, and global public goods); reducing the burden on recipient governments by coordinating aid with other donors; supporting the development of recipient country institutions; improving quality through rigorous, independent evaluation. The project aims for useful comparisons across donors, though the data limitations imply that a full index may not be possible in the first year of the project. A prototype assessment (or quasi-index) will be released in 2008. --Kate Vyborny Bibliography Aid for Trade Task Force. 2006. Recommendations of the Task Force on Aid for Trade. WT/AFT/1. Geneva: World Trade Organization. Arvis, Jean F., M. A. Mustra, John Panzer, Lauri Ojala, and Tapio Naula. 2007. Connecting to Compete: Trade Logistics in the Global Economy. Washington, DC: World Bank. Barder, Owen, and Nancy Birdsall. 2006. Payments for Progress: A Hands-Off Approach to Foreign Aid. CGD Working Paper 102. Washington, DC: Center for Global Development. Birdsall, Nancy. 2005. Seven Deadly Sins: Reflections on Donor Failings. CGD Working Paper 75. Washington, DC: Center for Global Development. Birdsall, Nancy, William D. Savedoff and Kate Vyborny. 2007. Progress-Based Aid for Education: A Hands-Off Approach. Washington, DC: Center for Global Development. Buys, Piet, Uwe Deichmann, and David Wheeler. 2006. Road Network Upgrading and Overland Trade Expansion in Sub-Saharan Africa. Policy Research Working Paper No. 4097. Washington: World Bank. Clemens, Michael, Steven Radelet, and Rikhil Bhavnani. 2004. Counting Chickens When They Hatch: The Short Term Effect of Aid on Growth CGD Working Paper 44. Washington, DC: Center for Global Development. Djankov, Simoen, Caroline Freund, and Cong S. Pham. 2006. Trading on Time  HYPERLINK "http://ideas.repec.org/s/wbk/wbrwps.html" Policy Research Working Paper Series, No. 3909. Washington, DC: World Bank. Global Partnership for Output-Based Aid (GPOBA). 2006. Lessons Learned in Infrastructure Services Provision: Reaching the Poor. OBA Working Paper. Washington, DC: World Bank. Global Partnership for Output-Based Aid (GPOBA). 2007. What is OBA? Supporting Infrastructure Delivery Through Explicit and Performance-based Subsidies. Washington, DC: World Bank. Gonzalez, Julio A,. Jose Luis Guasch, and Tomas Serebrisky. 2007. Latin America: Addressing High Logistics Costs and Poor Infrastructure for Merchandise Transportation and Trade Facilitation. Washington, DC: World Bank, processed. Independent Evaluation Group (IEG). 2006. Assessing World Bank Support for Trade, 1987-2004. Washington: World Bank. Joint Ministerial Committee of the Boards of Governors of the World Bank and the IMF on the Transfer of Real Resources to Developing Countries. 2007. Aid for Trade: Harnessing the Global Economy for Economic Development. Washington, DC: International Monetary Fund and World Bank. Levine, Ruth. Forthcoming. Performance-Based Incentives for Health: Realizing the Potential, Avoiding the Pitfalls. Washington, DC: Center for Global Development, processed. Lucas, Sarah. 2007. Lessons from Seven Countries: Reflections on the Millennium Challenge Account. MCA Monitor. Washington: Center for Global Development. Lyakurwa, William M., 2007. The Business of Exporting: Transaction Costs Facing Suppliers in Sub-Saharan Africa. Nairobi: African Economic Research Consortium. Mwencha, Erastus. 2007. Sub Saharan Africa: Factors Affecting Trade Patters of Selected Industries-Second Annual Report. Testimony before the US International Trade Commission. Washington, October 23. Njinkeu, Dominique, John Wilson, and Bruno Powo Fosso. 2007. Trade Facilitation: What is it and How does it Help? Nairobi: African Economic Research Consortium. OECD. 2006. Aid for Trade: Making it Effective. Paris: Organization for Economic Co-operation and Development. OECD. 2007. Trade-Related Assistance: What do Recent Evaluations Tell Us? Paris: Organization for Economic Co-operation and Development. Radelet, Steven. 2005. From Pushing Reforms to Pulling Reforms: The Role of Challenge Programs in Foreign Aid Policy. CGD Working Paper 53. Washington, DC: Center for Global Development. Radelet, Steven. 2006. A Primer on Foreign Aid. CGD Working Paper 92. Washington, DC: Center for Global Development. Roodman, David. 2006. Aid Project Proliferation and Absorptive Capacity. CGD Working Paper 75. Washington, DC: Center for Global Development. Savedoff, William D. and Ruth Levine. 2006. Learning from Development: the Case for an International Council to Catalyze Independent Impact Evaluations of Social Sector Interventions. CGD Brief. Washington, DC: Center for Global Development. van de Walle, Nicolas. 2005. Overcoming Stagnation in Aid-Dependent Countries. Washington: Center for Global Development. Wilson, John, Catherine L. Mann, and T. Otsuki. 2004. Assessing the Potential Benefits of Trade Facilitation: A Global Perspective. Policy Research Working Paper No. 3224. Washington: World Bank. Table 1 Indicators For Assessing The Impact Of Aid For Trade Aimed At Supply-Side Constraints Achievement of immediate project goalsImpact on Intermediate Objectives Impact on ultimate goalsMeasures of trade costs, competitivenessMeasures of trade and investment flowskilometers of roads built, maintained increases in sea, air port capacity increases in access to landlines, cell phones, internet access to credit reductions in power outages access to cold storage, especially in rural areas increased compliance with SPS, other international, standards rationalization, harmonization of regulations related to trade, transit in regional trade agreements, especially involving land-locked countries (e.g., common axle loads (appropriate for road capacity) and vehicle dimensions for trucks, rail gauge, operator licenses, etc. that loads do not have to be transferred at borders)reduction in number of forms required to import, export reductions in days for goods to clear customs reduction in trade taxes, especially on key technologies, other inputs reduction in internal transit time to market, port, or end user reduction in total time to get goods to destination reduction in the share of output not reaching market due to delivery delays competition measured by market shares of top 5, 10? firms providing logistics, transportation services reduction in transportation costschanges in cif/fob factor as proxy if direct costs unavailable size of inventories held effects of aid on exchange rateincreased capacity in sectors producing tradable goods or services increased value-added in tradable goods, services sectors increased firm-level productivity change in global export sharestotal and in key sectors diversification of exportsshare of top 5 products in total exports increased private investment (foreign or domestic) in and around infrastructure projects and in productive sectors receiving assistancehigher employment levels in tradable goods or services sectors increased numbers of subsistence farmers engaging in market activities (local or export if the result of aid for trade assistance to raise productivity, build roads, other activities where spillovers could occur) lower shares in economic activity, employment for informal sector higher shares for SMEs in formal sector higher and sustained growth following increases in trade higher overall employment if growth stimulated reductions in poverty rates Table 2. Three strategies for aid modalities and country governance Aid modality Good governance Average governance Weak governance Amount of funding Large Average Small Responsibility for setting priorities and designing projects and programs Mostly with recipients (country ownership) Combined donor and recipient Mostly with donors Program or project funding Mainly program and budget support Primarily projects, but some program and budget support Almost entirely projects Breadth of funded activities Broadsupport full poverty reduction and development strategy Moderatesupport areas with most promise for progress Narrowlook for specific opportunities where some progress is possible; focus on humanitarian relief and providing basic services Degree of donor flexibility Most flexible Limited flexibility Very little flexibility Recipients Mostly government, with some to NGOs and private sector Mix of government, NGO, and private sector Larger share to NGOs, with some to governments Length of donor commitment Long (5 years or more) Moderate (35 years) Short (1 year) Monitoring and evaluation Strong monitoring and evaluation with good baseline data; primarily focus on outputs and outcomes Strong monitoring and evaluation with good baseline data; focus on inputs as well as outputs and outcomes Strong monitoring and evaluation with good baseline data; very tight oversight and regular re-appraisal  Source: Replicated from Radelet (2005).  The recent evaluation of World Bank support for trade identified similar categories: trade liberalization and technical assistance for trade negotiations and ϲʹ accession, institutional trade facilitation (for example, customs reform), infrastructure-related trade facilitation, and private and public trade financing (Independent Evaluation Group 2006, p. 15).  See for example, Arvis et al. (2007); Lyakurwa (2007); Wilson, Mann, and Otsuki (2004); Njinkeu, Wilson, and Fosso (2007); Djankov, Freund, and Pham (2006); Gonzalez, Guasch, and Serebrisky (2007).  Radelet (2006); Clemens, Radelet, and Bhavnani (2004); Birdsall (2005); Levine and Savedoff (2006); OECD (2006, 2007). Roodman (2006) creates a theoretical model showing how donor proliferation could increase recipient costs, even to the point of having negative effects on development in some cases.     PAGE  PAGE 2 * Also Senior Fellow at the Peterson Institute for International Economics. I would like to thank Selvin Akkus for research assistance, Kate Vyborny for her contributions on aid effectiveness, and Nancy Birdsall, Michael Finger, Ann Tutwiler, Julie Howard, Daniel Karanja, and Shamarukh Mohiudden for thoughtful comments and suggestions. The views expressed are mine alone and not those of the staff, advisory committees, or boards of either the Center for Global Development or the Peterson Institute. PAGE  PAGE 13 * Also Senior Fellow at the Peterson Institute for International Economics. I would like to thank Selvin Akkus for research assistance and Nancy Birdsall, Kate Vyborny, and for thoughtful comments and suggestions. 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