Financing and Development: Donors must make the aid data revolution reality

Years ago, I spent a summer working in the research department of an investment bank. My job was to analyse company data and spot long-term trends in equities markets. As finance professionals know, the data can be overwhelming: numbers blinking on Bloomberg terminals, scrolling across TV screens and clogging up your email in endless reports. But in mature markets, the data is freely available on the day it’s published, and there are stiff penalties if it’s withheld or falsified. An army of analysts jumps on every quarterly earnings report or press release, digests its implications, and quickly raises the alarm if the numbers don’t add up. There are many obstacles to the efficient functioning of financial markets, but a shortage of information is not one of them.

The contrast with international development is stark. Last year, I helped the Government of Sierra Leone to set up a Situation Room to manage the fight against Ebola. The government and its partners were able to map where the sick people were, where the hospitals and clinics were, and how many people were being treated in each. Many partners have been generous with financial assistance – not least the UK. But the government often doesn’t know how much aid it is getting, or where that aid is going. Imagine opening an Ebola treatment centre without knowing who will pay the staff.

There is a lot of data in development, but most of it is buried in long reports and hidden in closed IT systems. Even if you can get hold of it, you can’t always trust it. In his book ‘Poor Numbers’, Morten Jerven explains why. One reason is that national statistics offices are rarely a priority for cash-strapped governments. But there is no excuse for the poor quality of data on aid. The governments and foundations who provide aid know where it is going and have in fact committed to publish this information to a common standard for aid reporting by the end of 2015. The International Aid Transparency Initiative (IATI) currently has over 300 aid organisations opening up their accounts and publishing their aid to the IATI Registry. Yet many leading donors of international aid are still publishing too little, too late.

Take Sierra Leone for example. You can see at www.d-portal.org that Sierra Leone received US$321 million for humanitarian aid in 2014. Almost all of that was for Ebola. The UK government was a major contributor, and the Netherlands and UN agencies also pitched in. But there is little information from major donors like the U.S., France or Germany. The U.S. government has committed over US$1 billion to fighting Ebola in West Africa. That is more than the entire annual budgets of Guinea, Liberia or Sierra Leone. Those governments need to know what donors are doing so they can use their own money to best effect and not spend it on the same things.

Aid transparency doesn’t have to be hard. Governments like the Netherlands have found that if they publish to IATI once, they can give the same data to their partners, taxpayers and other donors. The United Nations Development Programme has shown that UN agencies can do it too – indeed they ranked first place in our 2014 Aid Transparency Index. In the U.S., the Millennium Challenge Corporation and the President’s Emergency Plan for AIDS Relief are leading the way. Donors who publish soon find that transparency makes their aid better. The French Minister for International Development, Annick Girardin, told Devex what happened when France put its aid to Mali online at www.transparence-aide.gouv.fr:

Malians themselves come to the website to tell us, “this particular project did not meet expectations”, or “we would have preferred something different”. Beyond transparency, this is enabling participation of French citizens, but also of countries where we provide support through our partnerships.

The transparency rules in financial markets were usually established after stockmarket crashes like 1929 or 2008. It was during the Great Depression that the U.S. Congress required public companies to have their accounts audited, report their results once a quarter, and prohibited insider trading. The system isn’t foolproof, and requires constant updating, but no investor can imagine modern finance without data.

In 2013, a UN panel of presidents and prime ministers called for a data revolution in development. It’s time for aid donors to make that revolution a reality. See our campaign www.roadto2015 for more information.

Rupert Simons
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