Independent review of aid effectiveness
07 April, 2012
The Australian Government received the report of the Independent Review of Aid Effectiveness on 29 April 2011. The review is now being carefully considered by the government.
Independent Review of Aid Effectiveness [external website]
The review was undertaken by an independent panel and examined whether the current systems, policies and procedures for the aid program maximise effectiveness and efficiency.
The members of the panel were :
- Mr Sandy Hollway AO
- Dr Stephen Howes
- Ms Margaret Reid AO
- Mr Bill Farmer AO
- Mr John W.H. Denton
The panel was supported by a secretariat led by AusAID.
The panel consulted with key stakeholders, including non-government organisations, relevant Australian Government departments, partner governments in our region, and bilateral and multilateral donors.
The panel received approximately 300 written submissions from a broad cross-section of the Australian and international community. Many of these are referenced or quoted within the review. These submissions have been treated as public and are published on the aid review website, unless the author clearly indicated that they did not wish to have their personal information or submission made public.
Terms of reference
These terms of reference are also available as a PDF: Aid effectiveness review—Terms of reference [PDF 28kb]
The Australian aid program aims to assist developing countries reduce poverty and achieve sustainable development, in line with Australia's national interests. The program has doubled in size over the last five years to an estimated $4.3 billion in 2010-11 and, on current economic projections, will double again to meet the government's commitment to increase Australia's aid to 0.5 per cent of gross national income by 2015-16.
The government, Parliament and taxpayers need to be confident that this significant investment is both effective and efficient in fulfilling its objectives.
The government has taken a range of measures to improve the effectiveness and efficiency of the aid program. The Office of Development Effectiveness (ODE), which was established in 2006, has completed a number of reviews and evaluations of the program, including the Annual Review of Development Effectiveness, which is tabled in Parliament. The findings of this analysis are used to improve aid program planning and implementation. AusAID, the lead agency within the government on the aid program, has rigorous systems and processes in place to ensure that the aid program is well-managed and prioritised. These systems are reviewed and improved regularly. A review of advisers engaged under the aid program was recently completed, and a review of procurement and agreements processes has commenced. An audit of the aid program by the Australian National Audit Office in 2009 found that AusAID had effectively managed the increases in the program up to that time.
The Independent Review of Aid Effectiveness was conducted to ensure that the further increase in the aid budget to 2015-16 is well-managed and meets the governments objectives. This was the first independent public review of the aid program commissioned by the Australian Government since the Simons Review in 1996.
This review drew on the experience of the last five years, together with relevant international experience. It made recommendations regarding the structure of the program, as well as the planning, implementation and review arrangements needed to support delivery of a substantially enlarged aid program. The review will make a strong aid program even better.
In particular the review focused on:
- The structure of the program, noting in particular:
- the appropriate geographic focus of the program, taking into account partner country absorptive capacities
- the appropriate sectoral focus of the program, taking into account Australia's area of comparative advantage and measured development effectiveness results
- the relative focus of the aid program on low and middle-income countries
- the relative costs and benefits of the different forms of aid, including the role of non-government organisations and the appropriate balance between multilateral and bilateral aid funding arrangements.
- The performance of the aid program and lessons learned from Australia's approach to aid effectiveness.
- An examination of the program's approach to efficiency and effectiveness and whether the current systems, policies and procedures in place maximise effectiveness.
- The appropriate future organisational structure for the aid program, including:
- AusAID's organisational structure for aid delivery
- arrangements for the coordination of ODA across the public service
- coordination of Australia's ODA with other donors and institutions.
- The appropriateness of current arrangements for:
- review and evaluation of the aid program, including an examination of the role of the Office of Development Effectiveness and options to strengthen the evaluation of the aid program
- the management of fraud and risk in the aid program.
The review also examined broader international thinking on aid effectiveness and drew on work by the OECD DAC (including the most recent peer review of the Australian aid program), work on the approach and experience of non-state donors (such as the Clinton and Gates Foundations and non-government organisations) and the range of audits undertaken by the ANAO.
The review was conducted by a panel consisting of:
- Mr Sandy Hollway, AO,(Chairman), former secretary of two Australian Government departments and CEO of the Sydney Organising Committee for the Olympic Games, previously, an official of the Australian Department of Foreign Affairs and Trade for 16 years, an Australian diplomat at four overseas posts and Head of the International Division and Deputy Secretary of the Department of Prime Minister and Cabinet with responsibility for foreign aid and other international matters;
- Dr Stephen Howes, Director, International and Development Economics, Crawford School of Economics and Government at the ANU, previously worked as the Lead Economist for India for the World Bank and as Chief Economist at AusAID;
- Ms Margaret Reid, AO, has extensive experience with Australian non-government organisations working in international aid as the former President of the Executive Committee of the Australian Council for International Development. Ms Reid is also the first female President of the Australian Senate, and former World President of the Commonwealth Parliamentary Association;
- Mr Bill Farmer is a former senior diplomat. Mr Farmer was Head of Mission in the two largest recipients of Australian aid, Indonesia and Papua New Guinea. Mr Farmer was also the Deputy Permanent Representative of Australia to the United Nations;
- Mr John Denton, CEO and Partner at Corrs Chambers Westgarth is a Prime Ministerial appointee to the APEC Business Advisory Council and a member of the Boards of the Business Council of Australia and the Commonwealth Business Council. He has firsthand experience of development and conflict through postings to Bangladesh and Iraq. He is Chairman of Australia for United Nations High Commissioner for Refugees.
The panel was supported by a secretariat led by AusAID and drawn from a range of other government agencies, including central agencies and agencies involved in the delivery of the aid program, as necessary. The panel drew on expert advice as required.
The review undertook extensive consultations across the the Australian Government, non-government organisations and other key stakeholders in the Australian community. Fieldwork was also conducted to consult with a selection of Australia's bilateral and multilateral partners.
The review was received by the government on 29 April 2011 and is expected to be publicly released, together with the government's response, later in 2011.
Last Reviewed: 1 January, 2000