Where should the aid budget be spent? That’s a question that can provoke a lively debate. Politicians and newspapers regularly divulge into such conversations with sound-bites so repetitive you’d be forgiven for thinking they had seriously analysed the issue. Recent events have cast fresh eyes on this debate. Following Hurricane Irma, some of the Caribbean islands found themselves too rich, in terms of per capita GNI, to receive official development assistance (ODA), which caused outrage from some sections of the press. So what are the solutions? At RESULTS UK, we’ve been looking at where and how aid is allocated, particularly if aid to a country stops or changes. Today, we launch our new report introducing this topic: ‘Leaving No One Behind? The Impact of Donor Transition’.

What is transition?
Economic figures, such as Gross National Income (GNI) per capita, are often used by donors to determine who is eligible for aid. If GNI grows, donor support may decline, stop altogether, or be administered by somebody else. For example, the UK may decide to stop supporting country X completely, keep supporting country X but reduce its funding for health in that country, or keep funding country X but through the FCO rather than DFID. This process of a change in relationship is known as ‘transition’. There may be occasions when more than one donor enters into transition in the same country. This is known as ‘simultaneous transition’. For more on this, check out the latest report from the ACTION partnership.
Why does it matter?

It matters because it is happening now and lives are at stake. The Millennium Development Goal (MDG) period, and the aid disbursed during it, saw significant changes in the lives of the world’s poorest. We at RESULTS know of the life-changing impact of UK aid, we see it every day. Yet now, there are less than half the number of low-income countries (LICs) than in 2000 and more people living in poverty live in middle-income countries (MICs), than any other income classification. MiCs receive substantially less in health ODA than LICs per capita, and often have higher costs associated with health procurement. This can make it difficult to continue with important health services, let alone scale these up to reach communities already missing out.

If donors transition too early, or en masse, then fragile health systems can collapse. When there are already high rates of disease burden, a poor transition is likely to exacerbate these problems. Economic gains and human development which have been unlocked by donor support can be lost and investments unravel. This can have devastating effects on people’s lives.

What can be done about it?

A transition policy which guides the process of transition is vital for all international donors. This must be grounded in evidence. Importantly, economic figures cannot be considered in isolation when a donor is thinking of transitioning. In order to tackle extreme poverty and improve the lives of the world’s most vulnerable, any decision to withdraw or change support must take into account health and inequality indices. GNI figures can mask a particular region’s poverty, or a particular gender’s exclusion.

Donors must also consider the actions of other donors and ensure the transition process is gradual. They also should provide support to recipient countries on how to raise and disburse new finances. Additionally, donors have to be open, transparent, and communicate. This communication has to extend to other donors, national and regional governments, and local civil society organisations (CSOs). Local CSOs are important and integral partners for transition, and their inclusion is vital to ensure a holistic approach.

RESULTS UK will be launching more reports on this subject before the end of this year. Do check back for updates.