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Reality Check: Global vertical programmes: a tale of too many funds
26 August 2008
REPORT: Eurodad has produced a new “Reality Check” on vertical funds as a contribution to the Reality of Aid network for which Eurodad is the European regional hub. This report “Global vertical programmes: a tale of too many funds evaluates the phenomenon of vertical funds through the lens of aid effectiveness. Vertical funds present benefits but also pose challenges and these differ across sectors.
Liz Delph from Eurodad provides an overview of how vertical programmes have evolved in recent years and outlines the challenges and benefits of these financing mechanisms. She concludes that they are a reality of the development aid world and that their benefits should not be too quickly discarded. Nonetheless she suggests that given the problems with proliferation we badly need to rationalise the aid system. She proposes that for every new initiative, two existing malfunctioning initiatives should be shut down.
Frazer Goodwin from the European Public Health Alliance tackles the complex issue of vertical funds in the health sector. Whilst vertical programmes have helped to increase funding to the sector and had large impacts on specific health problems, the sheer number of initiatives has created serious challenges for coordination. He concludes saying that “a lesson that (the health) sector could provide to others is that even if vertical initiatives are required to tackle a short term or specific problem, their implementation cannot be a substitute for long term and more horizontal building of the sector as a whole.”
Lucy Baker from the Bretton Woods Project takes on the issue of financing climate change in her contribution “Funding for clean aid: who will fill the gap? Climate Investment Funds are taken to task for a number of reasons including their side-stepping of the UN Framework Convention on Climate Change (UNFCCC), that they may be diverting funds away from it and that given that they are being managed by the World Bank, developing countries do not have sufficient say in how they will be run.
Lucy Hayes from Eurodad argues that whilst the current food crisis has put agriculture and rural development on the agenda, NGOs should resist calling for a new global vertical initiative as a means of increasing aid to agriculture. The complexity of agricultural development and the need for a farmer-led bottom-up response are not conducive to such a vehicle. Rather than further worsening donor fragmentation, she argues that we need to review exiting aid mechanisms, making them more responsive to local needs, particularly those of poor farmers.
Finally Lucia Fry from the Global Campaign for Education, assesses the Education for All Fast Track Initiative. She argues that despite the sector focus of this initiative, it does not share many of the features typically considered to be characteristic of a vertical fund. However, although the EFA-FTI avoids many of the pitfalls of vertical funds with its focus on country ownership, it has not had the same success in mobilising funds as the health sector for example.
The reality of vertical funds is evolving, yet still provides lessons as we continue to learn how to better deliver aid. Eurodad and AWID are organising a workshop at the CSO Forum on Aid Effectiveness in Accra on the 1st September to further discuss the pros and cons of vertical funds.
Reality Check
: Kb