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Project Briefng 

T he prospects or developing countriesare shaped by a wide range o issues,some o which – such as politics – are,primarily, domestic, while others have

important cross-border dimensions. Theseinclude aid, but go ar beyond it. These ‘BeyondAid’ issues include trade, migration, investment,environmental issues, security and technology.In the context o globalisation, it is these issues,rather than aid alone, that will shape the develop-ment prospects or many countries. The Beyond

Aid agenda is about making sure that policies onthese issues – which go beyond the remit o aidagencies alone – deliver or development.

There are two aspects to the agenda. Thefrst concerns eorts by developing countries toengage more eectively with these broader issuesby putting in place appropriate, country-specifcpolicies and institutions. The second aspectconcerns eorts by powerul countries to ensurethat their policies on Beyond Aid issues support,or at least do not undermine, progress towardsthe Millennium Development Goals (MDGs),achieving win-wins between development and

other issues. This aspect o the agenda – a major ocus or the Center or Global Development’sCommitment to Development Index – is parto what is reerred to as Policy Coherence or Development (PCD). With support rom both theOrganisation or Economic Co-operation andDevelopment (OECD) and the UK Departmentor International Development (DFID), this Paper ocuses on the PCD angle, while emphasisingthat progress on the Beyond Aid agenda requiresaction by both developing and developed coun-tries, at global as well as national levels.

Policy coherence or development

Governments in the developed world areincreasingly aware o the importance o theBeyond Aid agenda and PCD. Eorts are beingmade – and in some cases resisted – on PCD

and development-riendly policies on a number o issues with important cross-border dimen-sions (see Table 1).

However, examples o incoherence are alltoo easy to nd. Policies on agricultural tradeare, perhaps, the most glaring. The provision bythe EU and the US o subsidies to their armers,while developing countries are encouraged toexport agricultural produce to world markets,makes little economic sense. On migration, too,incoherence is apparent. While the resulting

remittances are welcomed by developingcountries, policies promoting the migration o skilled health proessionals to the developedworld may reduce the impact o aid spent onhealth systems in those developing countries.

Governments in the developed world, aselsewhere, pursue many objectives. With elec-tions won by the political parties that appealto domestic constituencies and interests, andwith the interests o developing countriespoorly represented, it is not surprising thatdomestic objectives take priority over eectivepolicies or development.

Deending and promoting national interestsand reducing global poverty may, particularlyin the short term, appear to be in tension. Butin a world where the impacts o events thattake place in developing countries are elt ar beyond their borders, neglecting developmentmay undermine the pursuit o other objectives.As the 2008 OECD Development CooperationReport puts it, ‘all countries have a commoninterest in developing countries achievingsustainable and broad-based development’(OECD, 2008a: 28). Progress towards policiesthat are more coherent and supportive o devel-

opment is an important part o this process, inaddition to being part o the commitment bygovernments to MDG8, the building o a globaldevelopment partnership. The remainder o thisBrieng Paper explores the progress made onPCD by governments in the developed world.

Key points

• OECD-DAC members have

a mixed record on progress

towards Policy Coherence

or Development (PCD)

• PCD requires action on

three ronts: political

commitment; policy

coordination; and

monitoring, analysis and

reporting

• More action is needed

to gather evidence,

particularly rom

developing countries, to

make the case or PCD

‘Beyond Aid’ or sustainable developmentAlan Hudson and Linnea Jonsson

Project Briefng No 22 • May 2009

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Project Briefng 

The three phases o PCDProgress towards policy coherence – policies that sup-port, rather than undermine, each other – can be con-ceptualised as a three-phase cycle, with each phaseo the cycle supported by a building block (see Figure

1). All building blocks must be in place or a country tomake good progress towards policy coherence.

Phase one involves setting policy objectives and

determining which objective takes priority i thereare incompatibilities between policies. The buildingblock is political commitment, backed by policiesthat translate commitment into action.

Phase two involves working out how policies, or their implementation, can be modied to maximisesynergies and minimise incoherence. The buildingblock is policy coordination mechanisms to resolveconficts or inconsistencies between policies, andnavigate the complex politics o policy processes.

Phase three involves: monitoring, to collectevidence about the impact o policies; analysisto make sense o the data collected; and report-

ing back to parliament and the public. This phaseprovides the evidence base or accountability andor well-inormed policy-making and politics. Thebuilding block is eective systems or monitoring,analysis and reporting.

I progress around the policy coherence cycle is tolead to progress on PCD, development needs to begiven sucient weight at each phase o the cycle:political commitment and policies must give weightto development objectives; policy coordination musttake account o development interests; and monitor-ing, analysis and reporting must relate to develop-ment impacts and progress towards development

goals. Whether or not sucient weight is given todevelopment is largely a question o politics.

Governments in the developed world have madesome progress in putting in place the building blocksor PCD, with some countries – particularly in NorthernEurope – making very good progress (OECD, 2008b).For many countries, however, progress on PCD hasbeen mixed. Political commitments may have beenmade and policy coordination mechanisms estab-lished, or example, but with less progress made onmonitoring, analysis and reporting.

PCD in practice: Phase oneProgress on PCD starts with building block one:political commitment that is translated into clear,prioritised and coherent policies. All Memberso the OECD Development Assistance Committee(OECD-DAC) are in principle and on paper commit-ted to development, but some Members – includingItaly, Greece, Japan and Portugal – had not made acommitment to PCD at the time o their most recentOECD-DAC Peer Review.

More promisingly, the European Union (EU),the Netherlands and Sweden have given PCD acentral place in a cross-governmental approach to

international development. In the Netherlands, a2003 policy statement on ‘mutual interests, mutualresponsibilities’ stressed that eective develop-ment cooperation requires an integrated and coher-ent policy ramework covering diplomacy, politicaldialogue, security, trade, market access and aid.

Table 1: Examples o PCD in practice

Cross-border issue Aim Challenges Mechanisms and ora

Trade (including agricultural trade)

Enable developingcountries tobenet rom trade

Powerul agriculturalinterests; agriculturalsubsidies; tradebarriers

WTO ‘DevelopmentRound’; aid or trade

Migration

To enabledevelopingcountries tobenet rommigration

Political sensitivitiesabout immigration;diculty o reconcilinginterests o origin anddestination countriesand rights o migrants

Codes o conduct or therecruitment o health-workers and teachers;partnership agreements;dual citizenship

Investment

Enable developingcountries tobenet rominvestment

Balancing the need or developing countriesto attract internationalinvestmentand regulate it

appropriately

Corporate SocialResponsibility; UnitedNations Global Compact;OECD Guidelines or Multinational Enterprises;

Investment treaties

Environmentalissues, including climate change

Limit, and enabledevelopingcountries to adaptto, environmentalchange

Dependence on ossiluels; unsustainableconsumption practices

Burden-sharing betweendeveloped and developingcountries in internationalclimate changenegotiations; regulation o international timber trade

Security 

Enable developingcountries toavoid confict andinsecurity

Shiting priorities;understanding thedevelopment-securitynexus; regulatinginternational armstrade

Donors’ approaches toworking in ‘ragile states’;EU code o conduct onstrategic (arms) exports;International Arms TradeTreaty

Technology 

Enable developingcountries to make

use o appropriatetechnologies

Lack o incentivesor rms to invest

in research anddevelopment inrelation to productsdestined or developingcountry markets

Bilateral and internationalregimes or intellectual

property rights, includingin relation to genericmedicines; regulationo genetically-modiedorganisms; support or research and development

Figure 1: The policy coherence cycle

1. Setting and prioritising objectives 

Building block: political

commitment and policy

  3. Monitoring, analysis 2. Coordinating policy

and reporting and its implementation 

Building block: systems or Building block: policy

monitoring, analysis and reporting coordination mechanisms

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Project Briefng 

o PCD requires that the OECD, its Members, andothers, spend more time on the analysis o issuesthrough a PCD lens and less time on the promotiono PCD in general. The OECD Synthesis Report on PCD

suggests, or example, assessing the extent to whichthe lessons about PCD (see Box 1) have been appliedto a particular issue such as migration.

More ambitiously, a ocus on particular issuesmight make it possible to speciy results chains thatset out the links rom policy processes, to policyoutcomes, to policy impacts. This would provide abasis or establishing indicators along the resultschain, to better monitor progress and move beyonda ocus on policy inputs. Looking at specic issuescould also allow better analysis o the politicaleconomy or governance dynamics o, or instance,policy-making in particular developed countries.

This could include such issues as climate change,the recruitment o doctors and nurses rom develop-ing countries, or the regulation o tax havens.

The PCD agenda would also beneft rom a greater ocus on feld-level perspectives. Indeed, it is notpossible to generate the evidence needed to inormpolicy without such perspectives. While it is difcultto trace the impacts o one policy rom a particular 

developed country to a single developing country, amappings approach that analyses how a number o Beyond Aid issues play out in the context o a spe-cifc developing country is a promising way orward.

Bringing together both aspects o the Beyond Aidagenda – PCD and the engagement o developingcountries with cross-border issues – can generatethe evidence to inorm policy processes in develop-ing and developed countries. This could drive aster progress towards PCD and policies that are more‘development-riendly’, in practice as well as onpaper. Ultimately, such an approach could do muchto advance the Beyond Aid agenda and ensure thatBeyond Aid issues deliver or development.

Box 1: Lessons or OECD members

Phase one: Setting and prioritising objectives – requires political commitment and policy statements

Lesson 1: Educate and engage the public, working with civil society, research organisations and partner countries, to raise awareness and build support or PCD, on a long-term basis.Lesson 2: Make public commitments to PCD, endorsed at the highest political level, with clear links made topoverty reduction and internationally-agreed development goals.Lesson 3: Publish clearly prioritised and time-bound action agendas or making progress on PCD.

Phase two: Coordinating policy and its implementation – requires policy coordination mechanismsLesson 4: Ensure that inormal working practices support eective communication between Ministries.Lesson 5: Establish ormal mechanisms at suciently high levels o government or inter-ministerialcoordination and policy arbitration, ensuring that mandates and responsibilities are clear, and involving ullyMinistries beyond development and oreign aairs.Lesson 6: Encourage and mandate the development agency to play a pro-active role in discussions aboutpolicy coordination.

Phase three: Monitoring, analysis and reporting – requires eective systemsLesson 7: Make use o eld-level resources and international partnerships to monitor the real-world impactso putting PCD building blocks in place.Lesson 8: Devote adequate resources to the analysis o policy coherence issues and progress towards PCDdrawing also on the expertise o civil society and research institutes, domestically and internationally.Lesson 9: Report transparently to parliament and the wider public about progress on PCD as part o reporting

on development cooperation activities and progress towards meeting the MDGs.

By Dr Alan Hudson, ODI (a.hudson@odi.org.uk) and LinneaJonsson, London School o Economics. The fndings draw onresearch conducted in early 2008, unded by the Organisationor Economic Co-operation and Development (OECD). Funding or this paper was provided by OECD and the UK Departmentor International Development (DFID). Additional resources:

www.odi.org.uk/country_mappings ; www.oecd.org/develop-

ment/policycoherence; www.dfd.gov.uk/mdg/aid-eective-

ness/policy-coherence.asp; and www.cgdev.org/cdi

OECD (2008a) ‘Development Co-operation Report 2007’, OECD Journal on Development , Volume 9, No. 1.

OECD (2008b) ‘Policy coherence or development: Synthesis report on the OECD-DAC Peer Reviews, 2003-07’ (ODI with ippr).

Reerences