Can donors prove that aid works?

Does development research make a difference in Africa? It may sound like a strange question, but it is one donors are increasingly asking.

It is easy to see why. Having spent billions on stimulus packages to kick-start their stricken economies, rich governments are querying why, with unemployment rising at home and people foreclosing on loans, billions of taxpayers' money still goes overseas.

It is not just avarice at play. Some voices - the most publicised is Zambian economist Dambisa Moyo, writing in her recent book Dead Aid - are saying that aid makes poverty worse, not better.

So it's no surprise that aid agencies are facing pressure to prove their budgets come to good use.

Aid scepticism

But what is remarkable, is that the debate is raging most fiercely in altruistic, peace-loving Sweden.

Sweden spends over 90 million kronor (US$13 million) every day on aid - much of which goes to Africa. But aid scepticism has flooded the country since the financial downturn and a May announcement that Zambia's health ministry reportedly embezzled millions of Swedish aid kronor.

The sceptics include Sweden's aid minister, Gunilla Karlsson, who last month called for a "more honest" discussion on what aid can achieve.

Sweden's aid budget, is already feeling the pinch from the new financial and political climate - the Swedish International Development Cooperation Agency (SIDA) is planning to reduce its 2010 budget for “research cooperation with developing countries” from around US$148 million to US$112 million (see Sweden slashes research aid budget).

Other countries may also make cutbacks. A representative from Irish Aid told SciDev.Net that Ireland is looking at a possible 20 per cent across-the-board aid budget cut from anticipated 2010 levels. And a representative from the Organisation for Economic Co-operation and Development, which collects international data on aid flows, said he expected a global drop in 2010.

Any falls in aid budgets to Africa will come on top of funding cuts from private sources that the continent is already experiencing (see "Africa Analysis: Global finance crisis will hit grants").

The situation is causing concern across the developing world. Representatives from the Consultative Group on International Agricultural Research (CGIAR), which has been identified as a likely victim of the Swedish cuts, said earlier this month that these might "seriously curtail" potential long-term returns on Sweden's investments.

Show us it works!

Even donors that are not openly speaking about cuts are under increasing pressure to prove that their budgets offer value for money - both for the poor and for the taxpayers who foot the bill.