Lessons to be learnt about how to manage aid exit and transition

Today, the Independent Commission for Aid Impact published its review on DFID’s approach to exit and transitions in aid partnerships. DFID’s score was amber-red, which means that its record was unsatisfactory in most areas.

As this review highlights, there are clearly some important lessons to be learnt about how to do aid exit and transition better to make sure that we can build better post-aid relationships and secure the development impact of UK aid. Putting at risk development gains – potentially achieved over decades – is not good value for money nor does it live up to our commitments and responsibilities to partner countries.

It was also concerning the see the confirmation of the impact this can have on local civil society – both in terms of limiting influence and support to maintain vibrant civic space. Civil society plays a vital role in accountability, as a watchdog, helping people to hold their governments’ to account which can underpin better governance and is another way to help hold onto development wins.

Following the Bilateral Aid Review in 2011, there was a reduction of DFID’s aid to partner countries that led to a performance review of 7 transitions: Burundi, Cambodia, China, India, Indonesia, South Africa and Vietnam.

• No standard approach to exit and transition. Exit: In Vietnam, Cambodia and Burundi, DFID had clear objectives that aligned with the UKG policies, that is it withdrew where other donors could act or countries were able to tackle poverty on their own means.
Transition: shift from aid to new partnerships (China, India, Indonesia, South Africa). In China, India and South Africa, DFID did not define the new relationship and how it would work. DFID informed high-level officials in those countries of the broader goals, while it did not engage other national stakeholders.
• Significant amounts of aid continued through other channels: DFID ended bilateral aid to India while it continued technical assistance and aid-funded loans and equity investments. The Prosperity Fund currently includes China and India.
• This shift in the development relationship was not communicated clearly to the UK public: the message was that China and India were not receiving assistance at all. “DFID’s communication [on aid] could have been made clearer, both to the public at home and in the recipient country.”
• At the time of exit, there were little safeguards to minimize reversals and to protect what UK aid achieved.
• Phasing out has an impact on national civil society causing a sharp reduction in funding, as other donors left too, and a loss of access to policy makers. In India, government and civil society stakeholders said the space for civil society narrowed after DFID left.
• On an operational basis: exit was “orderly and effective”, most notably in Vietnam where there was a strong plan in place, but there were considerable weaknesses in all the case studies. Partners and DFID staff complained of a quick transition.
• Serious communication errors affected exit and transition, putting at risk the relationships with partners.
• At the UK government level, the lessons learnt from exit/transitions were not shared internally, raising questions about how Prosperity Fund is going to work.