As nations move toward using local systems to manage and operate international development projects, the United States should consider using a standardized risk assessment framework, La Follette School students recommend in an analysis prepared in consultation with the U.S. Government Accountability Office.
To improve development aid practices, the international development community is urging donors to use the public financial management systems in recipient countries as well as local procurement systems, say authors Tara Baumgarten, Michaela Meckel, Jélan Passley and Maria Toniolo, who produced the report in the spring 2014 Workshop in International Public Affairs taught by Tim Smeeding.
The students evaluated four international donors: Sweden, the United Kingdom’s Department for International Development, the Asian Development Bank and the World Bank. They looked at donor performance on six goals:
- increase the percentage of effectively managed aid delivered via local systems,
- increase local institutional capacity,
- deliver aid efficiently,
- identify and assess potential risks throughout the project,
- manage risks throughout the project, and
- ensure compatibility with the U.S. context.
“By analyzing the development and risk management strategies of these donors, we provide perspectives of donor models by which the United States may be able to adapt to increase responsible administration of aid through recipient [public financial management] and procurement systems,” the report says.
In addition to use of a standardized risk assessment framework, the students recommend the United States consider increasing its cooperation with other donors and that it take an incremental approach to expanding its use of local systems.
“For instance, the United States may use partner systems for just smaller or shorter projects initially,” the report says. “In addition, the United States does not have to give aid through all three components of a partner country’s PFM system. These incremental approaches would allow the United States to isolate the best ways of utilizing local systems to provide development assistance.”