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Project Briefing 

No 22 • May 2009

‘Beyond Aid’ for

sustainable development
Alan Hudson and Linnea Jonsson

he prospects for developing countries and development-friendly policies on a number
are shaped by a wide range of issues, of issues with important cross-border dimen-
some of which – such as politics – are, sions (see Table 1).
primarily, domestic, while others have However, examples of incoherence are all
important cross-border dimensions. These too easy to find. Policies on agricultural trade
include aid, but go far beyond it. These ‘Beyond are, perhaps, the most glaring. The provision by
Aid’ issues include trade, migration, investment, the EU and the US of subsidies to their farmers,
environmental issues, security and technology. while developing countries are encouraged to
In the context of globalisation, it is these issues, export agricultural produce to world markets,
rather than aid alone, that will shape the develop- makes little economic sense. On migration, too,
ment prospects for many countries. The Beyond incoherence is apparent. While the resulting
Aid agenda is about making sure that policies on remittances are welcomed by developing
Key points these issues – which go beyond the remit of aid countries, policies promoting the migration of
agencies alone – deliver for development. skilled health professionals to the developed
• OECD-DAC members have There are two aspects to the agenda. The world may reduce the impact of aid spent on
a mixed record on progress first concerns efforts by developing countries to health systems in those developing countries.
towards Policy Coherence engage more effectively with these broader issues Governments in the developed world, as
for Development (PCD) by putting in place appropriate, country-specific elsewhere, pursue many objectives. With elec-
policies and institutions. The second aspect tions won by the political parties that appeal
• PCD requires action on
concerns efforts by powerful countries to ensure to domestic constituencies and interests, and
three fronts: political that their policies on Beyond Aid issues support, with the interests of developing countries
commitment; policy or at least do not undermine, progress towards poorly represented, it is not surprising that
coordination; and the Millennium Development Goals (MDGs), domestic objectives take priority over effective
monitoring, analysis and achieving win-wins between development and policies for development.
reporting other issues. This aspect of the agenda – a major Defending and promoting national interests
focus for the Center for Global Development’s and reducing global poverty may, particularly
• More action is needed
Commitment to Development Index – is part in the short term, appear to be in tension. But
to gather evidence, of what is referred to as Policy Coherence for in a world where the impacts of events that
particularly from Development (PCD). With support from both the take place in developing countries are felt far
developing countries, to Organisation for Economic Co-operation and beyond their borders, neglecting development
make the case for PCD Development (OECD) and the UK Department may undermine the pursuit of other objectives.
for International Development (DFID), this Paper As the 2008 OECD Development Cooperation
focuses on the PCD angle, while emphasising Report puts it, ‘all countries have a common
Overseas Development Institute
that progress on the Beyond Aid agenda requires interest in developing countries achieving
ODI is the UK’s leading independent action by both developing and developed coun- sustainable and broad-based development’
think tank on international develop- tries, at global as well as national levels. (OECD, 2008a: 28). Progress towards policies
ment and humanitarian issues. that are more coherent and supportive of devel-
ODI Project Briefings provide a opment is an important part of this process, in
focused and specialised summary of
Policy coherence for development addition to being part of the commitment by
a project, a country study or regional Governments in the developed world are governments to MDG8, the building of a global
analysis. increasingly aware of the importance of the development partnership. The remainder of this
This and other ODI Project Briefings Beyond Aid agenda and PCD. Efforts are being Briefing Paper explores the progress made on
are available from made – and in some cases resisted – on PCD PCD by governments in the developed world.
Project Briefing 

Table 1: Examples of PCD in practice 1). All building blocks must be in place for a country to
make good progress towards policy coherence.
Cross-border issue Aim Challenges Mechanisms and fora Phase one involves setting policy objectives and
Enable developing Powerful agricultural WTO ‘Development
determining which objective takes priority if there
Trade (including countries to interests; agricultural Round’; aid for trade are incompatibilities between policies. The building
agricultural trade) benefit from trade subsidies; trade block is political commitment, backed by policies
that translate commitment into action.
To enable Political sensitivities Codes of conduct for the Phase two involves working out how policies, or
developing about immigration; recruitment of health- their implementation, can be modified to maximise
countries to difficulty of reconciling workers and teachers;
benefit from interests of origin and partnership agreements; synergies and minimise incoherence. The building
migration destination countries dual citizenship block is policy coordination mechanisms to resolve
and rights of migrants
conflicts or inconsistencies between policies, and
Enable developing Balancing the need for Corporate Social navigate the complex politics of policy processes.
countries to developing countries Responsibility; United Phase three involves: monitoring, to collect
benefit from to attract international Nations Global Compact;
investment investment OECD Guidelines for
evidence about the impact of policies; analysis
and regulate it Multinational Enterprises; to make sense of the data collected; and report-
appropriately Investment treaties ing back to parliament and the public. This phase
Limit, and enable Dependence on fossil Burden-sharing between provides the evidence base for accountability and
developing fuels; unsustainable developed and developing for well-informed policy-making and politics. The
countries to adapt consumption practices countries in international building block is effective systems for monitoring,
issues, including
to, environmental climate change
climate change
change negotiations; regulation of analysis and reporting.
international timber trade If progress around the policy coherence cycle is to
Enable developing Shifting priorities; Donors’ approaches to
lead to progress on PCD, development needs to be
countries to understanding the working in ‘fragile states’; given sufficient weight at each phase of the cycle:
avoid conflict and development-security EU code of conduct on political commitment and policies must give weight
insecurity nexus; regulating strategic (arms) exports;
international arms International Arms Trade
to development objectives; policy coordination must
trade Treaty take account of development interests; and monitor-
ing, analysis and reporting must relate to develop-
Enable developing Lack of incentives Bilateral and international
countries to make for firms to invest regimes for intellectual ment impacts and progress towards development
use of appropriate in research and property rights, including goals. Whether or not sufficient weight is given to
technologies development in in relation to generic development is largely a question of politics.
relation to products medicines; regulation
destined for developing of genetically-modified Governments in the developed world have made
country markets organisms; support for some progress in putting in place the building blocks
research and development
for PCD, with some countries – particularly in Northern
Europe – making very good progress (OECD, 2008b).
Figure 1: The policy coherence cycle For many countries, however, progress on PCD has
been mixed. Political commitments may have been
made and policy coordination mechanisms estab-
1. Setting and prioritising objectives
lished, for example, but with less progress made on
Building block: political
commitment and policy
monitoring, analysis and reporting.

PCD in practice: Phase one

Progress on PCD starts with building block one:
political commitment that is translated into clear,
3. Monitoring, analysis 2. Coordinating policy prioritised and coherent policies. All Members
and reporting and its implementation of the OECD Development Assistance Committee
Building block: systems for Building block: policy (OECD-DAC) are in principle and on paper commit-
monitoring, analysis and reporting coordination mechanisms ted to development, but some Members – including
Italy, Greece, Japan and Portugal – had not made a
commitment to PCD at the time of their most recent
OECD-DAC Peer Review.
More promisingly, the European Union (EU),
the Netherlands and Sweden have given PCD a
central place in a cross-governmental approach to
international development. In the Netherlands, a
The three phases of PCD 2003 policy statement on ‘mutual interests, mutual
Progress towards policy coherence – policies that sup- responsibilities’ stressed that effective develop-
port, rather than undermine, each other – can be con- ment cooperation requires an integrated and coher-
ceptualised as a three-phase cycle, with each phase ent policy framework covering diplomacy, political
of the cycle supported by a building block (see Figure dialogue, security, trade, market access and aid.
Project Briefing 

For the EU – building on the Maastricht Treaty’s OECD-DAC Members. Many countries, such as
principles of coherence, complementarity and Belgium, Greece, Italy, Japan, Norway and Spain,
coordination – the 2005 European Consensus on were found, in recent peer reviews, to lack analytical
Development makes a specific commitment to PCD, capacity, or were failing to make good use of their
requiring policies in all areas to take account of analytical capacity. This applies to countries that are
development objectives. at the forefront of progress on PCD as well as to the
In 2003, the Swedish Parliament endorsed the laggards. For instance, the UK’s Peer Review notes
Policy for Global Development, making equitable that more progress is needed in recognising, under-
and sustainable development the shared responsi- standing, specifying and assessing policy coherence
bility of all ministries and placing PCD at the centre issues, while the Peer Review for Germany reports
of Swedish development policy. Under the Policy that monitoring and reporting on policy coherence
for Global Development, ministers with responsi- has yet to become explicit and systematic. However,
bility for domestic issues, as well as those covering there are signs of progress. In Sweden, Finland
international issues, must ensure that their poli- and the UK, there is now a requirement that the
cies take account of development. The entry of this Government report annually to Parliament on PCD.
Policy into law followed extensive public outreach The EU is also making welcome progress. In 2007,
and awareness-raising to generate support. the EU produced its first biennial report on PCD. The
report – designed to inform the PCD debate and to
serve as a public information tool – assesses the
PCD in practice: Phase two efforts of EU Member States to enhance PCD at an
Members of the OECD-DAC have made varying EU level, at national level, and in terms of specific
degrees of progress in putting into place the neces- issues. The issue-specific element focuses on the
sary building block for phase two: policy coordina- policies and policy processes of Member States on 12
tion mechanisms that take full account of develop- priority areas: trade; environment; climate change;
ment interests. For some countries, such as Ireland security; agriculture; fisheries; the social dimen-
and New Zealand, with compact governments and sion of globalisation, employment and decent work;
short lines of communication, informal mecha- migration; research and innovation; the information
nisms have, until recently, been seen as sufficient, society; transport; and energy. The report is based
an approach that may well have costs in terms of on data provided by Member States themselves and
transparency and accountability. For others, includ- is rather limited in terms of analysis of impacts, but
ing Denmark and the UK – two countries that have provides a good basis on which the EU can build.
made reasonable progress overall on PCD – policy
coordination has been dealt with on an issue-by-
issue basis, with, for instance, the UK paying par- Policy: Next steps
ticular attention to trade, debt and conflict. Progress on PCD is about the interplay of politics,
Other countries have created innovative for- institutions and evidence. It requires governments
mal mechanisms, in addition to the Cabinet and to: manage the politics by generating the necessary
Inter-Ministerial Committees that are the standard support for sustained political commitment; estab-
approach to policy coordination. Germany requires lish a focal point to coordinate progress and ensure
that legislative proposals are screened for their that development interests are well-represented;
development implications, and Sweden, Finland and invest in effective systems for monitoring and
and the Netherlands have established clear focal analysis, with transparent reporting on results.
points with lead responsibility for PCD. The progress made by OECD-DAC Members on
In 2002, the Netherlands established a dedi- PCD and its building blocks has been mixed. This
cated Policy Coherence Unit, formalising the previ- is, in part, because development is not at the top of
ously ad hoc approach to PCD. The Policy Coherence the agenda for most governments or people in the
Unit covers all three phases of the policy coherence developed world. But it is also due to the lack of per-
cycle. Its work includes coordinating the positions of suasive evidence about the benefits of coherence,
various ministries on PCD-related issues and ensur- the costs of incoherence and the results of putting
ing that the Netherlands’ positions in EU meetings the various building blocks in place. With better evi-
take account of development impacts. The Policy dence, the balance of political interests could shift
Coherence Unit provides a clear focus for PCD work to give development and PCD a higher priority.
and policy coordination, enabling the Ministry for OECD work on PCD has highlighted the lack of
Foreign Affairs to work proactively and intensively attention given to collecting relevant data. A 2007
on coherence. OECD progress report, for example, suggests that
further efforts are needed to enhance identification
of best institutional practices on the achievement
PCD in practice: Phase three of PCD and to ensure systematic assessment of its
It is when we come to phase three of the policy impact – and the costs of incoherence – in reducing
coherence cycle – monitoring, analysis and report- poverty and supporting sustainable growth.
ing – that we find the greatest weakness among Generating better evidence to alter the politics
Project Briefing 

Box 1: Lessons for OECD members

Phase one: Setting and prioritising objectives – requires political commitment and policy statements
Lesson 1: Educate and engage the public, working with civil society, research organisations and partner
countries, to raise awareness and build support for PCD, on a long-term basis.
Lesson 2: Make public commitments to PCD, endorsed at the highest political level, with clear links made to
poverty reduction and internationally-agreed development goals.
Lesson 3: Publish clearly prioritised and time-bound action agendas for making progress on PCD.

Phase two: Coordinating policy and its implementation – requires policy coordination mechanisms
Lesson 4: Ensure that informal working practices support effective communication between Ministries.
Lesson 5: Establish formal mechanisms at sufficiently high levels of government for inter-ministerial
coordination and policy arbitration, ensuring that mandates and responsibilities are clear, and involving fully
Ministries beyond development and foreign affairs.
Lesson 6: Encourage and mandate the development agency to play a pro-active role in discussions about
policy coordination.

Phase three: Monitoring, analysis and reporting – requires effective systems

Lesson 7: Make use of field-level resources and international partnerships to monitor the real-world impacts
of putting PCD building blocks in place.
Lesson 8: Devote adequate resources to the analysis of policy coherence issues and progress towards PCD
drawing also on the expertise of civil society and research institutes, domestically and internationally.
Lesson 9: Report transparently to parliament and the wider public about progress on PCD as part of reporting
on development cooperation activities and progress towards meeting the MDGs.

of PCD requires that the OECD, its Members, and developed country to a single developing country, a
others, spend more time on the analysis of issues mappings approach that analyses how a number of
through a PCD lens and less time on the promotion Beyond Aid issues play out in the context of a spe-
of PCD in general. The OECD Synthesis Report on PCD cific developing country is a promising way forward.
suggests, for example, assessing the extent to which Bringing together both aspects of the Beyond Aid
the lessons about PCD (see Box 1) have been applied agenda – PCD and the engagement of developing
to a particular issue such as migration. countries with cross-border issues – can generate
More ambitiously, a focus on particular issues the evidence to inform policy processes in develop-
might make it possible to specify results chains that ing and developed countries. This could drive faster
set out the links from policy processes, to policy progress towards PCD and policies that are more
outcomes, to policy impacts. This would provide a ‘development-friendly’, in practice as well as on
basis for establishing indicators along the results paper. Ultimately, such an approach could do much
chain, to better monitor progress and move beyond to advance the Beyond Aid agenda and ensure that
a focus on policy inputs. Looking at specific issues Beyond Aid issues deliver for development.
could also allow better analysis of the political
Overseas Development economy or governance dynamics of, for instance,
Institute policy-making in particular developed countries.
111 Westminster Bridge This could include such issues as climate change, By Dr Alan Hudson, ODI ( and Linnea
Road, London SE1 7JD the recruitment of doctors and nurses from develop- Jonsson, London School of Economics. The findings draw on
ing countries, or the regulation of tax havens. research conducted in early 2008, funded by the Organisation
Tel +44 (0)20 7922 0300 for Economic Co-operation and Development (OECD). Funding
The PCD agenda would also benefit from a greater
Fax +44 (0)20 7922 0399 for this paper was provided by OECD and the UK Department
focus on field-level perspectives. Indeed, it is not for International Development (DFID). Additional resources:
Email possible to generate the evidence needed to inform; policy without such perspectives. While it is difficult ment/policycoherence;
to trace the impacts of one policy from a particular ness/policy-coherence.asp; and

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acknowledgement and a References
copy of the publication.
© ODI/OECD 2009 OECD (2008a) ‘Development Co-operation Report 2007’, OECD Journal on Development, Volume 9, No. 1.
ISSN 1756-7602 OECD (2008b) ‘Policy coherence for development: Synthesis report on the OECD-DAC Peer Reviews, 2003-07’ (ODI with ippr).