pkp2__ understanding aid to ard and food security: germany

7/30/2019 PKP2__ Understanding aid to ARD and food security: Germany

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Global Donor Platformfor Rural Development

WORKING PAPER

GERMANY


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The Global Donor Platform for Rural Development commissioned three comprehensive studies to capture Plat-

form members knowledge on key issues affecting the delivery and impact of aid in ARD:

PKP 1 Policy coherence for agriculture and rural development

PKP 2 Aid to agriculture, rural development and food security Unpacking aid flows for enhanced

effectiveness

PKP 3 The strategic role of the private sector in agriculture and rural development

The PKPs are the products of extensive surveys of Platform member head office and field staff, visits to countryoffices, workshops dedicated to sharing findings and refining messages, and successive rounds of comments on

drafts.

On the basis of each PKP, separate policy briefs will be published.

For more information on the PKPs visit donorplatform.org

This working paper is only available electronically and can be downloaded from the website of the Global Donor Platform for Rural Development at:

www.donorplatform.org/resources/publications

Secretariat of the Global Donor Platform for Rural Development,

Dahlmannstrasse 4, 53113 Bonn, Germany

Email: [email protected]

The views expressed herein are those of the authors and do not necessarily represent those of individual Platform members.

All rights reserved. Reproduction and dissemination of material in this information product for educational or other non-commercial purposes is

authorised, without any prior written permission from the copyright holders, provided the source is fully acknowledged. Reproduction of material inthis information product for resale or other commercial purposes is prohibited without written permission of the copyright holders. Applications for

such permission should be addressed to: Coordinator, Secretariat of the Global Donor Platform for Rural Development, Dahlmannstrasse 4, 53113

Bonn, Germany, or via email to: [email protected].

Global Donor Platform for Rural Development 2011

About the

Platform Knowledge Piece series


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Platform Knowledge Piece 2:

Aid to agricultur e, rural development and food security: Germ any working paper 1

Contents

Li st of f igu r es and tabl es ............................................................................................................................... 3Acr onym s and Abbr eviat ions ........................................................................................................................ 5Executive summary ....................................................................................................................................... 6

Policy trends .............................................................................................................................................. 7Aid measurement ...................................................................................................................................... 8Expenditure trends .................................................................................................................................... 9Les sons ...................................................................................................................................................... 9

Can available aid dat a accurat ely describe t he spendin g patt ern s of Germ an aid in ARD& FS? ...... 9How wel l do aid data r efl ect pol icies? ................................................................................................ 10

Introduction .................................................................................................................................................. 11Background .............................................................................................................................................. 11Met hodology and hypot heses ................................................................................................................. 11

Over view of Germ an developm ent cooper ation actor s and syst em ......................................................... 13BM Z .......................................................................................................................................................... 13Recipient partners ................................................................................................................................... 13KfW ........................................................................................................................................................... 16GIZ ............................................................................................................................................................ 17Other im pl em ent ing par tn er s ................................................................................................................. 18Other ministries ....................................................................................................................................... 18Parliament and civil society .................................................................................................................... 18 Multilaterals............................................................................................................................................. 18Int ernat ional agr eem ent s ....................................................................................................................... 19Aid ef fec ti veness ...................................................................................................................................... 19Sum m ar y .................................................................................................................................................. 19

ARD and food- secur it y polici es in Germ an developm ent cooper ation ..................................................... 20BMZ themes and policies ........................................................................................................................ 20 GIZ th em es ............................................................................................................................................... 21KfW policy perspective ............................................................................................................................ 22 Missing lin k th e poli cies of r ecipien ts ................................................................................................. 22Poli cies fr om oth er sour ces .................................................................................................................... 23Sum m ary of m ain poli cy st r ands ............................................................................................................ 23

Aid data in Germ an developm ent cooper ation ........................................................................................... 24


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BM Z in ter nal syst em ............................................................................................................................... 24GDC LE m ar ker ........................................................................................................................................ 25GDC and t he AFSI pledges ...................................................................................................................... 26GDC r epor tin g to Par li am ent .................................................................................................................. 26GDC reporting to civil society .................................................................................................................. 27GDC r epor tin g to r ecipien t coun tr ies ..................................................................................................... 27KfW and GIZ reporting ............................................................................................................................. 27Evaluation department ............................................................................................................................ 27GDC relationship with OECD-DAC .......................................................................................................... 27ODI syst em ............................................................................................................................................... 28

Aid f low s t o ARD& FS in Germ an devel opm ent cooper ation ..................................................................... 29Compar ison acr oss defin iti ons ............................................................................................................... 29

Germ an t otal ODA ................................................................................................................................ 33GDC to ARD& FS ....................................................................................................................................... 34Int r asect or al com posit ion of ARD& FS ................................................................................................... 35Region al com pos it ion of ARD&FS .......................................................................................................... 40Trends wit hin ARD& FS by im plem entin g agency, channel , fl ow t ype and m odality ........................... 41

KfW ....................................................................................................................................................... 42Section conclusion ................................................................................................................................... 43

Anal ysis ........................................................................................................................................................ 43Ann exes ........................................................................................................................................................ 50

Sour ces int er viewed for th e stu dy .......................................................................................................... 50Refer ences ............................................................................................................................................... 50


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List of f igures and tables

Figure 1. Policy and spending relationships between BMZ and aid recipients and im plem entingorganisations. .............................................................................................................................................. 15Figur e 2. GDC ODA curr ent com m itm ents t o ARD& FS according t o OECD- DAC AFF and AFF+ and ODI

defin it ions, 1973 2009 (US$ m il li ons). ....................................................................................................... 31Figur e 3. ODI defi nit ion as a per cent age of OECD- DAC AFF and AFF+ defin iti ons. ................................ 32Figur e 4. GDC shar e of total ODA to ARD&FS repor ted to th e OECD- DAC, 1973 2009 (constant

com m it m ent s). ............................................................................................................................................. 34Figure 5. Germ an ODA, 1973 2008 (total and to ARD& FS; constant comm itm ents US$ mil l ions, five-

year moving averages)................................................................................................................................. 35Figure 6. Germ an aid to ARD& FS by aid category, 1973 2008 (constant US$ m ill ions, five-year m oving

aver ages). ..................................................................................................................................................... 36Figure 7. Germ an aid to ARD& FS by aid category, 1973 2008, excluding KfW (constant US$ m ill ions,

five-year moving averages). ........................................................................................................................ 37Figure 8. Germ an aid to ARD& FS by aid category, 1973 2008 (share of total fl ows to ARD& FS, five-

year moving averages)................................................................................................................................. 37Figure 9. Germ an ODA support to banking and financial services (1984 2008) (constant US$ m ill ions,

five-year averages). ..................................................................................................................................... 38Figure 10. Germ an aid to selected subcategories of agricultu ral aid, 1985 2008 (constant US$

millions, five-year averages). ...................................................................................................................... 39Table 5. Percent age share of ODA in th e BMZ database corr esponding to t he ODI definition of

ARD& FS. ....................................................................................................................................................... 39Figur e 11. Germ an aid to ARD& FS by type of fl ow, 1995 2008 (constant US$ m ill ions). ....................... 42Figure 12. KfW support captured by the LE- . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 43

Table 1. GDC com m itm ents in 2008 to r ural development (ODI definition and BMZ LE-

m il l ions). ....................................................................................................................................................... 30Table 2. ODA volum es r epor ted t o th e OECD-DAC CRS database, 2008 and 2009 (constant

com m itm ent s, US$ m il li ons). ..................................................................................................................... 31Table 3. LE- 2 project s in Bur ki na Faso in 2008 fr om th e BMZ dat aset. ................................................... 32Table 4. Pr ojects coded 31120 in Bu r kin a Faso in 2008 fr om th e CRS dataset . ...................................... 33


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Table 6. Percentage of Ger m an ARD& FS aid allocated to agricultu ral production, processing and

m arket ing, em ergency relief and welfare, and rur al socio-economic developm ent, by region, 1995

2008. ............................................................................................................................................................. 40Table 7. BMZ recipients by change in share of funding (comparison of five-year averages, 1995 99 and

2004 08). ...................................................................................................................................................... 41


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Acronyms and Abbreviations

AA Auswartiges Amt (Federal Foreign Office)

AFF agricult ure, fishing and forestr y

AFF+ AFF plus aid to rur al development, food aid/food security and emer gency food aid

AFSI L'Aquil a Food Securit y Initiat ive

APPM agricult ural production, processing and m arketing

ARD&FS agricult ure, rur al development and food security

BMELV Bundesm inisterium fr Ernhr ung, Landwirt schaft und Verbr aucherschutz (Federal

Ministr y of Food, Agricul tur e and Consumer Protection

BMZ Bundesm inisterium for wirt schaftl iche Zusamm enarbeit und Entwicklun g (Federal

Ministr y for Economic Cooperation and Development)

CRS Creditor Reporti ng System

DAC Developm ent Assistance Comm itt ee of the OECD

DEG Deutsche Investitions-u nd Entwicklun gsgesellschaft (Germ an Investm ent and

Development Bank)

Destatis Statistiches Bundesamt Deutschland (Federal Statistical Office)

GDC Germ an Developm ent Cooper ation

GDPRD Global Donor Platform for Rural Development

GIZ Deutsche Gesellschaft fr Internationale Zusamm enarbeit (Germ an Agency for

International Cooperation)

GTZ Deutsche Gesellschaft fr Technische Zusamm enarbeit (Germ an Agency for Technical

Cooperation)

InWent Internationale Weiterbildun g und Entwicklung (Capacity Building International)

KfW Kreditanstalt fr Wiederaufbau Entwicklungsbank (Credit Bank for Reconstruct ion,

Development)MIC m iddle-income country

NGO non-governm ental organisation

OECD Or ganisation for Economic Co-oper ation and Developm ent


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Executive summaryGerm an official developm ent assistance (ODA) is delivered thr ough a num ber of channels, involving

several Germ an governm ental agencies and private contractor s. The Bundesminist erium fr

wir tschaftl iche Zusamm enarbeit und Entwicklung (BMZ) is the Germ an Federal Ministr y for Economic

Cooperation and Developm ent, r esponsible for policy oversight and overall coordination of Germ an

bill ion. ODA provided by the Auswrt iges Amt (AA, Federal For eign Office) and that deliver ed via the

European Union and the Bundeslnder (Germ an regional governm ents) accounts for the vast majorit y

of the rem ainder. The Bundesminist erium fr Um welt, Natur schutz und Reaktor sicherheit (Federal

Ministr y for the Environm ent, Natur e Conservation and Nuclear Safety) and the Bundesm inisterium

fr Ernhr ung, Landwirtschaft und Verbr aucherschutz (Federal Ministr y of Food, Agricultu re and

Consum er Prot ection) are m ain other m inistr ies involved in agricul tur e, ru ral developm ent and food

security (ARD&FS). This study concentrat ed m ainly on bilateral aid delivered wit hin t he Germ an

system , and on BMZ in particular as it r epresents the lar gest share of ODA to ARD&FS.

The BMZ is responsible for policy, strat egy, agreeing projects with the r ecipients and coor dination. It

is split into thr ee main departm ental types: operations departm ents responsible for allocating aid;

policy depart m ents responsible for supporting operations depart m ents in their field of expertise; and

support departm ents responsible for t he functioning of BMZ as an organisation. Unlike the m ajority of

donors, BMZ does not have a large num ber of staff in aid r ecipient countr ies. For t he execution of

Deutsche Gesellschaft f r

Internationale Zusamm enarbeit (GIZ) and Kreditanstalt fr Wiederaufbau, Entwickl ungsbank.

GIZ is a private com pany whose shares ar e wholl y owned by the Germ an governm ent but whose

m anagem ent is independent. It was form ed in January 2011 from the m erger of t hree agencies that

im plement Germ an ODA: Deutsche Gesellschaft fr Technische Zusam m enarbeit(Germ an Agency for

Technical Cooperation, GTZ), Internationale Weiterbildung und Entwicklung (Capacity Buil ding

International, InWent) and Deutscher Entwicklun gsdienst (Germ an Developm ent Service).

, with a small share fr om AA. GIZ also work s

for other donors, such as the European Comm ission. GIZ is comm only mistaken for an arm of the

Germ an governm ent because it has a greater pr esence in recipient countr ies than BMZ and it

provides significant policy advice to BM Z at headquarter s level. Therefor e, whilst GIZ is not officially a

donor, its rol e in the negotiation and execution of developm ent projects m eans that it is often

perceived to be one.

KfW is part of the m uch larger KfW Group. KfW is curr ently responsible for about 30% of Germ an

ODA. Of approxim ately 500 staff , some 100 are based over seas. A standar d recipient c ountr y office

would have just one mem ber of KfW staff wor king with l ocal staff in a fairl y centr alized system. KfW

does not im plem ent projects itself; t he project executing organisation is always an institution in the

partner country, possibly supplemented by contr acted consult ants/or ganisations.

Germ an aid is prim arily allocated thr ough biennial m eetings between BMZ and each aid recipient

countr y. In these meetings, existing projects are assessed and priority them es for development

cooperation and support ing projects ar e selected. These country- level negotiations are a k ey part of

setting policy for Germ an aid, in what is, in theory, a very demand- led approach. In practice, however,ther e are som e constraints. Whilst BM Z selects the prior ity sectors in negotiation with the partner , it


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is not completel y flexible with t he volum e of com m itm ents, i.e. the BMZ negotiator s have a reference

figure upon w hich to base spending, which is related t o them atic and geographic quotas. Project

design is prim arily done by contr acted Germ an organisations and this also determ ines the volum e

and nature of support . Having all pr iority sectors and often projects decided at th e country level in

consultation with part ners r educes the abil i ty of headquart ers- level BMZ policy to determ ine theallocation of spending.

Because they contain the m ajority of the institu tional knowl edge in Germ an aid, GIZ and KfW are

comm only contracted to wr ite BMZ str ategies, advise recipient governm ents, advise both parties

during negotiations, support t he BMZ internal com m issioning process and design and prepare project

ideas; they are also contracted to im plem ent pr ojects. Despite this, they are not for m ally responsible

for policy and are not full y integrated into the Germ an aid data system. This causes breaks in th e two-

way flow between aid data and policy. A furt her disjunctur e is the split wit hin the BMZ between policy

depart m ents and operations departm ents. Whilst policy depart m ents are r esponsible for policy in

their specific area, operations departm ents are r esponsible for selecting pr ojects with t he recipients

in the r egion they cover. The result seem s to be that t he path from BMZ policy to BMZ spending is

indirect. BMZ policy depart m ents seek to influence BMZ operations departm ents. At th e same tim e,

GIZ and KfW are tr ying to anticipate BMZ policy fashions and design appropr iate projects wit h

recipient m inistries. Finally, BMZ operations departm ents seek to influence the recipient

governm ents over the choice of priority sectors and in r etur n are infl uenced by them . Because of this

it is difficult to see how new BMZ policies translate int o changes in spending.

The str uctur e of Germ an development assistance must be understood on both a form al (segregated)

and inform al (integrat ed) basis. Form ally, there are few links and opportunit ies for infor m ation

exchange between BMZ and implem enting agencies. Inform ally, however, they seem m uch m ore

integrated, iterat ing policy, knowledge, project design and spending decisions between t hem. Asthese procedures are not f orm alised, m any of the data and policy relationships are indirect and t his is

l ikely to pose substantial difficulties for identifying the im pact of changing policy in term s of changing

spending patter ns. The operational r equirem ents of pr oviding aid to ARD& FS and the n eeds of

different user s of data suggest that ther e is a need for a wide variety of different sources and systems

for aid data. In addition, the study identified a wide r ange of different sources of policy, as outl ined

below.

Germ an development cooperation t o support ARD&FS is driven by a range of policies and

comm itm ents. Some policies, such as comm itm ents to international agreements and politicalannouncements, are very visible. Other s, such as the individual agreem ents with r ecipient countr ies,

are less visible. The role of BMZ policy docum ents and the policies of the impl ement ing organisations

appear t o be less direct in shaping the uses of Germ an aid.

The new Germ an coalition governm ent brought r ur al development back as a political prior ity and

issued a paper on food security and rur al development covering four m ain topics: agricult ure, natur al

resour ces, social infr astruct ur e and institutions, and policy. There ar e other r elevant policy

documents in t he areas of water, cl im ate and finance, for example. These policy papers ar e produced

by BMZ sectoral departm ents and appear to serve mainly as inform ation for the operations

depart m ents to use when com m issioning projects and guidance for th e implem enting organisations

when designing projects. Notably, they are actuall y writt en by the implem enting organisations, in this

case GIZ staff on contract. In t erm s of their im pact on spending, because they are not dir ectly driving


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a process of allocation, we would expect to see a (non- linear) uptake a few years after the new

str ategy is produced plus a few mor e years for actual disbur sement due to t he lag between designing

and implem enting projects. It r emains unclear wh ether anyone monitor s whether th e policy does

resul t in changed patterns of spending.

Different t ypes of policies change at different speeds. The previous Rural Development Strategy

lasted 10 years. The fact that it did m ay refl ect an increase in 2001 in the priorit y accorded to rur al

development compar ed with other sectors. This was followed by a decline, and then another increase

in 2011 in the l evel of pr iority accorded. The new policy m ay also em phasise different aspects of r ur al

development , i.e. a change in composition of Germ an aid to the sector or differ ent approaches.

This study found it difficult to identify past BMZ policies, other th an thr ough anecdote and discussion.

This notwithstanding, reported policy changes to look for when examining tim e-ser ies data include: (i)

a reduction in spending on large scale integrated r ural development projects dur ing the 1980s; (i i) a

reduction in core agricult ural spending during th e 1980s; (i ii) a shift t owards environm ental/cl im ate

aspects of ARD&FS from 1992, the date of the United Nations Conference on Environm ent and

Development; (iv) an increased em phasis on the hum anitarian and em ergency aspects of food from

Initiative fr om 2009 onwards.

Despite these policy shifts, KfW reports t hat the actual projects carr ied out in the agricultu ral and

ru ral development domain have not changed significantl y for 30 years, either in volum e or substance,

despite changes in the coding and labell ing of support to the sector.

BMZ has developed its own system for r ecording aid data at the pr oject l evel. The database uses

purpose codes defined by the Development Assistance Comm ittee of t he Organisation for Economic

Co-oper ation and Developm ent (OECD- DAC) to specify the beneficiar y sector . To compil e it, BMZ

draws on data pr ovided by the im plem enting agencies, which appears t o be entered at the planning

stage of the project preparation cycle, i.e. before a fir m comm itm ent is m ade. The database does not

seem to record pr oject disbursem ents, and thus seems designed prim arily for planning and

allocation purposes rather t han for tr acking expenditure. The data also do not seem to include

inform ation on aid delivered thr ough other channels such as via other m inistr ies, general budget

suppor t or via NGOs.

The database uses a system of them atic mar kers, allowing the BM Z to code projects to them atic

groups different from OECD-DAC groupings. The rur al development m ark er (known as LE, i.e.

Lndliche Entwicklung) covers the areas of interest t o this study. It differs fr om t he definition of the

OECD-DAC of aid to ARD&FS (refer r ed to as AFF and AFF+ by this st udy). The LE m ark er h as been in

use for about 15 years. It has just undergone a change to move from being a binary m arker , where

projects either qualify as LE or do not, to a system t hat also allows pr ojects t o be recorded as part ial

LE. Ther e is a list of OECD-DAC codes that qu alify as LE and of those that qu alify as partial LE. Coding

of the thematic m arker s presum ably takes place at the same tim e as the sectoral coding and is at the

project level. There is a wide r ange of qualifying sectors. Core sectors r anging from agricult ure,

forestr y and fishing to agro-industr y, rur al development and food security qualify for ful l LE status. A

m uch wider r ange of sectors qualify as partial L E, including governm ent and civil society, water

supply, environm ental protection, confl ict management, m arket pr omotion and energy.


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l lows significant flexibil i ty to include projects not str ictly related to food

security, such as water , energy and biodiversit y projects. This raises questions about the

comparabil i t y of com m itm ents and tr acking exercises across donors.

OECD-DAC mem bers has r emained r oughly stable at

approxim ately 10% since 1970. In 2009 Germ an aid account ed for 0.35% of gross nat ional incom e.

Figur es on aid to ARD&FS vary depending on the definit ion used. Based on BM Z data (which w ere

available for only three years) and its LE mark er, Germ an aid comm itm ents to rur al development

am ount f ound if applying the wide ODI definition of aid to ARD&FS (which is br oader th an the OECD-

DAC definitions).

Using data from the OECD-DAC Creditor Reporting System to analyse trends, the following patt erns

are noticeable. As a share of total Germ an aid, support t o ARD& FS has risen gr adually in nominal

term s since 2001, but is l ower than t he average level of support between 1973 and 1990. The r elative

weight of the sector in tot al Germ an aid has declined significantly it was 14% in 1998 and 5% in

2008. This declin e has been greater than t he aver age for OECD-DAC donor s (from 15% to 11%, for th e

same period).

In term s of the policy strands outl ined pr eviously, it is conceivable that the increase in expenditure in

the 1990s approxim ates to the r esponse to the Eart h Summ it and the m ost r ecent increase since 2005

approximates to t he increased focus on hum anitarian and em ergency aspects of food policy. Other

tr ends worth noting are the virtual disappearance of aid to agricul tur al production inputs and the

significant r ise in aid to agricul tur al policy and development and agricultur al r esearch and extension.Categories, such as business suppor t services and banking and financial services (not typically

counted as ARD aid) are also increasingly im portant.

Although the data from the different datasets are not dir ectly comparable, the datasets do not

generally contradict each other in ter m s of general t rends. Where t here are differences these could

be due to a variety of data m easurement issues, such as: (i) different coverage of coordinating

m inistr ies within Germ an aid; (i i) use of different financial years; (i i i) different values for project

volum es, e.g. due to different int erpr etations of the comm itm ent stage in the project comm issioning

cycle; and (iv) exchange rat e differ ences.

Aid data as generated by the Germ an aid system are not designed for t racking spending to an

individual sector. BMZ as the m ain source and user of Germ an aid data does not typicall y require data

past tr ends or com paring aid allocations across donors. Indeed, the incentives for coding projects to

an OECD-DAC purpose code are not ones that favour international com parabil i ty and there ar e few

checks of the coding by international data users. For example, a change of code m ay reflect an

intern al reorganisation of departm ents that histor ically used different sector codes rath er than a realchange in spending.


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Where the collection system is designed for a single purpose, data appears to be m ore r eliable. For

exam ple, using internal databases for inter nal planning benefits from a concept of com m itm ents

tailored to int ernal budgeting. Conversely, using internal allocation datasets for external r eporting on

project disbursem ents seems m ore l ikely to result in inaccuracies and com prom ises in data quality.

The path fr om Germ an policies to aid allocation and spending is indirect. Aside from the data issues

and additional com plications such as appropr iate time lags, it is import ant to understand the nature

of Germ an policy prior ities. Firstly, policies stem fr om a variety of sources so there is no single clear

policy position towar ds the ARD&FS sector. Secondly, policies are not designed to dir ectly allocate

expenditur e; rather they indirectl y affect choices at all levels of Germ an aid, which in tur n m ay

influence all ocations and spending. Thirdl y, policy is often designed to influence m any aspects of

Germ an ARD& FS cooperation other than th e volum e of expenditur e, such as quality and/or approach

taken. Fourthl y, some policy changes m ay reflect changes in concepts of the sector, for exam ple the

unpopularity of Integrated Rur al Development pr ogram m es and their subsequent rebr anding asgovernance or decentr alisation, and this has had a large im pact on the volum e of aid categorised

under Rur al Development sector codes although not necessaril y on the conte nt of assistance.

Do Germ an ARD&FS aid system s provide appropr iate data to ensure th at aid is transparent and m ore

firm ly based on development resul ts? With r egards to transparency, one drawback of the curr ent

system is that it does not seem to favour sharing of aid inform ation as the default. Doing so would

im ply a political change, a cultu ral change and a shift in those responsible for m eeting the Paris and

Accra targets from BMZ headquarter s down to the implem enting organisations. Crossing this form al

divide in the Germ an system w ould involve a change in responsibil i ty with r espect t o aid data and

empower ing the im plem enting organisations to form ally take on the role of inform ing the Germ an aid

system . With regards to resul ts- based management, two features are impor tant: clarit y on the

volum e of resources invested to pursue cert ain results and inform ation on the achievement of such

resul ts. Within the Germ an aid system, onl y the im plem enting agencies appear to have detailed

project data (on tim ing, conditions and disbursem ents) and the staff and capacity in countr y to absorb

inform ation about t he achievem ent of r esults. Hence, a different approach to h andling of aid data is

requir ed, with a m ore active role for BMZ in absorbing data from the bottom , if results- based

m anagem ent is to be m ainstream ed into the Germ an aid system . Overal l, a better specified aid data

system is requir ed, which makes the m ost of the position held by each Germ an aid actor.


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IntroductionThis case study of aid-data systems r elating to agricultur e, rur al development and food security

(ARD& FS) in Germ an development cooperation is part of a lar ger st udy comm issioned by the Global

Donor Platfor m for Rur al Development on aid to ARD& FS. Carr ied out by the Overseas Development

Institute (ODI), this case study contr ibutes to the evidence on tw o key aid-m easurement questions:

1. Do available data give us an accurate representation of donor and recipient policies in ARD&FS?2. Do aid data and th e way the data are pr ovided form a good basis for a st rong bond between policy,

plannin g and spending and, as a consequence, enhanced developm ent effect iveness?

Aid flows are compl ex, largely unregulated tr ansfers of financial and non- financial assistance. The

documentation of such fl ows has no single overar ching pr otocol. Several system s have developed tofi l l this gap for pur poses including operational use, strat egic review and public accountabil i ty.

These processes include broad m ult i lateral system s such as th e Creditor Reporting System (CRS) of

the Or ganisat ion of Econom ic Co- t Assistance

Com m ittee (DAC). There are al so individual or integrated system s developed within donor agencies or

in r ecipient countr ies. The International Aid Transparency Initiative is an international attem pt to

agree a com m on standard for aid data and there are special purpose international systems such as

AFSI) for r eporting on specific international comm itm ents. There

is no single auth orit ative set of data on aid flows. Each source has sever al advantages and

disadvantages depending on the use of the data.

Against this backdrop of data uncertainty there is a perception that aid to agr icultur e and rur al

developmen t (ARD) and food securit y has been declining in volum e rel ative to aid as a whole (for

exampl e, see von Br aun et . al. (1993), Hazell and von Br aun (2006) and Isl am (2011).

Germ an developm ent cooper ation (GDC) was selected as a donor case study because of inter est in

donors with m ult iple implem enting agencies and the stru ctur e of separating policy from

im plement ation. Germ any is also one of the lar gest bilateral donors to ARD&FS. The case study is not

an evaluation of the effectiveness of GDC but an attem pt to under stand the natur e of the l inks

between dat a, policy and spending in ARD& FS.

This case study follows a new approach to defining and measuring aid flows to ARD&FS. This was

developed by the wider study team and is outl ined in greater detail in the synthesis report and

accom panying m ethodology paper. In br ief, the new m easure of aid to ARD&FS is an attem pt to

refl ect curr ent practice in funding and also thinking about the scope of ARD&FS as a cross- cutting

sector . The ODI definition is br oader than t he cur r ent OECD definition s because it includes a wider

range of sectors and uses a m ethodology for incorpor ating shares of sectors that indir ectly contribute

to ARD& FS spending. Furt her details ar e available in the synthesis report f or t he wider study.

This case study start s by exam ining the r elevant actor s in GDC aid to ARD&FS and their roles in

tr anslating aid policy into spending. From the different actors, specific policies towards ARD&FS areidentified, and a m ore general and stylised model of how policies have changed over tim e is


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established. The different tasks t he actors perform have different data requirem ents and in many

cases are support ed by differ ent data systems. The case study identifies the various aid measur ement

system s in use and th e types of data output s they produce.

The case study then uses the available data and asks whether the tr ends in spending m atch thetr ends in policy identified earl ier and whether this is a reasonable expectation. It does so through

several key questions:

Can available aid data describe accur ately th e spending patter ns of GDC in ARD& FS? How wel l do data on GDC aid spending r eflect GDC policy policies? How do the str uctur e of GDC and its m anagem ent of ARD& FS policies and spending across

diverse agencies, sectors, departm ents, partner s and budget l ines influence the data that is

available and the natur e of the l ink s between data and policy prior ities?

To conclude, the case study aims t o learn from GDC practices for m easuring aid to ARD& FS. It

identifies exam ples of potent ial good practice by GDC in measur ing, tr acking and accounting for aidflows t o ARD& FS. In part icular , the case study looks for evidence of practices that st rengthen

coherence between policy, planning and resource allocation, and, as a consequence, enhance

development effectiveness.

Som e of this case study's start ing hypotheses are that:

Aid agencies and recipient governm ents have internal m onitoring systems that pr ovide mor eaccurate inform ation on how the sector is being supported than publ ically available data on gl obal

aid stati sti cs (e.g. OECD-DAC CRS);

Data on spending captured in publically available aid-data systems does not ful ly refl ect statedpolicy priorities of donor agencies; and

The conventional m easure of aid to ARD&FS used by global aid statistics is narr owly defined anddoes not take into account all r elevant fl ows to the sector.


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Overview of German development

cooperation actors and systemThis section examines t he actors, aid allocation and policy system s in Germ an development

cooperation.

Germ an official developm ent assistance (ODA) is r outed thr ough a num ber of channels, involving

several m inistries at the top level. The Bundesminister ium f r Wirt schaftl iche Zusamm enarbeit und

Entwicklung (BMZ) is the Germ an Federal Ministr y for Economic Cooperation and Developm ent, and

is r esponsible for policy oversight and overall coordination of ODA. In 2009 BMZ was dir ectly

responsible for 64% of Germ an ODA, wort h approxim ately 5.5 bil l ion.1 ODA provided by th e

Auswr tiges Am t (Federal For eign Office, AA) and that del ivered via the Eur opean Union and the

Bundeslnder (Germ an regional governm ents) accounts for t he vast m ajority of the rem ainder. This

study concentr ates on bilateral aid delivered within the Germ an system and in particular on BMZ as it

repr esents the largest share.

Execution of cooperation under BM Z involves a num ber of actor s. BMZ is r esponsible for policy,

str ategy, agreeing projects wit h the r ecipients and coordination. For the execution of its projects it

comm issions im plem enting organisations, primar ily the Deutsche Gesellschaft fr Inter nationale

Zusamm enarbeit (Germ an Agency for International Cooperation, GIZ) and Kreditanstalt fr

Wiederaufbau, Entwicklungsbank (Credit Bank for Reconstru ction, Development , KfW). These

organisations then work w ith executing agencies in the partn er countr y to realise the project.

In the sim plest ter m s, aid is all ocated by BMZ as follows: BMZ agrees a set of projects with aid

recipient countr ies every two years and then contr acts them out t o the implem enting agencies to

deliver. The reality is far m ore nuanced as i l lust rated by Figure 1, which identifies the m ult iple stages

and intertw ined roles of BMZ, recipients and im plem enting agencies.

To support t his approach, BMZ is split into thr ee main depart m ental types: operations depart m ents

responsible for allocating aid flows, policy departm ents r esponsible for support ing operations

depart m ents in their field of expertise, and support depart m ents responsible for the functioning of

BMZ as an or ganisation. Within t he ODI definition of ARD& FS, BMZ has several policy departm ents.

Unlike the m ajority of donor aid/development m inistr ies, BMZ does not maintain a large staff in aid

recipient countr ies and its r oles of institutional and sectoral knowl edge, project preparation and

interaction with r ecipients are perform ed by the staff of the implem enting organisations.

Germ an aid is prim arily allocated thr ough biennial meetings between the BMZ and each aid recipient

countr y. Every two years, th e priorit y themes for development cooperation, and ther efore the pr ojects

and sectors to be supported, are selected by BMZ in cooperation with t he recipient countr y. In the

1 http://www.bmz.de/de/ministerium/zahlen_fakten/Mittelherkunft_der_bi-_und_mult i lateralen_ODA_2008-

2009.pdf
http://www.bmz.de/de/ministerium/zahlen_fakten/Mittelherkunft_der_bi-_und_multilateralen_ODA_2008-2009.pdfhttp://www.bmz.de/de/ministerium/zahlen_fakten/Mittelherkunft_der_bi-_und_multilateralen_ODA_2008-2009.pdfhttp://www.bmz.de/de/ministerium/zahlen_fakten/Mittelherkunft_der_bi-_und_multilateralen_ODA_2008-2009.pdfhttp://www.bmz.de/de/ministerium/zahlen_fakten/Mittelherkunft_der_bi-_und_multilateralen_ODA_2008-2009.pdf


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interl eaving year, existing projects ar e evaluated and a needs assessment per form ed to pr ovide input

into the next biennial m eeting.2

GDC has both priorit y recipient part ners, who generally have thr ee priority them es, and non-pr iority

partner s, who are allowed one priorit y sector. Each priority area has a sector str ategy paper . Once theprior ity them es have been selected, BMZ then contr acts GIZ and KfW to design potential pr ojects t o fit

the them es based on the sector str ategy papers. They do this in collaboration wit h the r elevant

m inistr ies in the recipient countr y. The impl ement ing organisations then present designed projects to

the BMZ as a concept and a budget. BMZ then author ises the projects it wishes to t ake place.

The recipient- countr y-level negotiations are a key part of sett ing GDC policy. In th eory this is a very

demand- led approach. In pr actice there are a couple of constraints. The recipient partner s do not

have full f lexibil i ty. Whilst the BMZ selects the pr iority sectors in negotiation with the partner , it is not

complet ely flexible with t he volum e of comm itm ents, i.e. the BMZ negotiators have a reference figure

on which t o base spending, which is r elated to them atic and geographic quotas. Project design is

prim arily done by contracted Germ an organisations and this also determ ines the volum e of support.

Recipients essentiall y shop from GDC support, m eaning that pr ior t o the biennial m eeting GIZ and

KfW have been involved in lengthy discussions with t he partn er t o make sur e that the selected prior ity

sector is l ik ely to have feasible projects in th e pipeline and also is l ikely to m eet BMZ s approval. If a

recipient countr y requests a type of assistance and BMZ r efuses, ther e has been a m istake and

probably bad advice before the negotiations. Projects, once im plem ented, are m anaged at t he BMZ

end by operations depart m ents (regional desk officer s) and in countr y by GIZ and KfW employees

(com m issioned by BMZ). Having all prior ity sectors and often pr ojects decided at the countr y level in

consultation with part ners r educes the abil i ty of BMZ headquarters and BMZ policy to determ ine the

allocation of spending.

Because they contain the m ajority of the instit utional knowl edge in GDC, GIZ and KfW are com m only

contracted to w rit e the BMZ str ategies, advise the recipient m inistries, advise both parties dur ing the

negotiations, support t he BMZ inter nal com m issioning pr ocess and design and prepare the pr oject

ideas; they are also contr acted to implem ent the pr ojects. Despite this, they are not for m ally

responsible for policy and are not full y integrated into t he GDC data system . This causes significant

breaks in the tw o-way flow betw een aid data and policy. This is not to suggest that it is not a good and

efficient system , but fr om the perspective of using spending data to identify changes in BMZ policy it

is quite an im pedim ent.

2 http://ww w.bmz.de/de/publikationen/reihen/sonderpublikationen/BMZ_auf_einen_Blick.pdf
http://www.bmz.de/de/publikationen/reihen/sonderpublikationen/BMZ_auf_einen_Blick.pdfhttp://www.bmz.de/de/publikationen/reihen/sonderpublikationen/BMZ_auf_einen_Blick.pdf


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Figure 1. Pol icy and spending relationships between BMZ and aid recipients and implementing

organisations.

Source: BMZ (http://www.bmz.de/en/im ages/BilderApproaches/planung_durchfuehrung_zus.jpg).

A furth er disjunctur e is the split within BM Z between policy depart m ents and operations

depart m ents. Whilst policy departm ents are r esponsible for policy in their specific area, operations

depart m ents are r esponsible for selecting projects with t he recipients in t he region they cover. Again,

ther e is no direct l ink between the two. Operations staff ar e not sector specialists and do not have

sector tar gets or r esponsibil i ties. Again, the result seem s to be that the path from BMZ policy to BMZ

spending is indirect. BMZ policy depart m ents seek to influence BMZ operations departm ents. At the

same t im e, GIZ and KfW are t rying to anticipate BMZ policy fashions and design appropriate pr ojects

with r ecipient m inistr ies. Finally, the BMZ operations depart m ents seek to influence the r ecipient

governm ents over t he choice of priority sectors and in ret urn are influenced by them . Because of this,

it is difficult to see how new BMZ policies translate int o changes in spending. The m ain role for BMZ
http://www.bmz.de/en/images/BilderApproaches/planung_durchfuehrung_zus.jpghttp://www.bmz.de/en/images/BilderApproaches/planung_durchfuehrung_zus.jpg


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policy departm ents appears to be political engagement in policy debates and maintaining th e quality

of projects pursued.

The answer the question, ARD&FS fallen?

governm ent sector r equests and indirect BM Z policy influence on BMZ operations departm ents andon KfW and GIZ project design teams. Im portantl y for this st udy, these flows of pol icy do not

necessarily m atch flows of data and reporting.

As discussed, GIZ and KfW are not part of the Germ an governm ent. As such they are not bound

beyond their contr actual r elationships. Although both ar e controll ed by the Germ an governm ent, GIZ

is a private com pany and also implem ents pr ojects for other donors, e.g. the European Comm ission.

Similar ly, KfW Bankengru ppe (the wider Kf W group) is controll ed not by BMZ but by the Germ an

federal governm ent and federal states. This means that neither of the impl ement ing agencies has the

m andate or r esponsibil i ty a governm ent departm ent would h ave, e.g. towards GDC comm itm ents on

aid effectiveness, on r eporting, on sector overviews, on r elationships towards other donors etc.,

unless specifically contr acted. From another perspective, staff in t he impl ementing agencies (who

form the vast m ajority by both num ber and institutional knowledge) are not accountable either to BMZ

or f or BM Z policy choices.

The implication of t his is that the im pact of policy changes on aid spending is not very predictable.

Mitigating this, one assumpt ion is that BMZ regional desk officer s are aware of the latest policies are

and have several st rong incentives to follow them , e.g. their career prospects. Sim ilarl y, whilst

im plement ing agency staff have the flexibil i ty to design pr ojects that m ay not align with BMZ policy,

they are constr ained by the need to secure BM Z funding.

As discussed, there ar e mul tiple im plem enting organisations in GDC and they perform different r oles.

The two main im plem enting agencies are split between financial and technical cooperation.

KfW is part of the m uch larger KfW Group. KfW is curr ently responsible for r oughly 30% of Germ an

ODA.3 Traditionally KfW has m anaged large- scale loan-financed projects with associated long

tim escales of between 5 and 20 years. Of approxim ately 500 staff, som e 100 are based overseas. A

standard r ecipient countr y office would have just one mem ber of KfW staff work ing with l ocal staff in

a fairly centralised system . KfW does not implem ent projects itself. The project- executing

organisation is always an institut ion in the partner country, possibly supplem ented by contr acted

consultants/organisations.

Focussing on support to ARD&FS, several 'competence centr es' cover ARD& FS, ranging fr om

agricult ure and natur al r esource m anagem ent (also covering environment and forestr y) to health and

education, and infrastr uctur e and finance (including m icrocredit). KfW officials int erviewed estim ated

that 50% of projects fitt ing the ODI ARD&FS definition would fall u nder t he agricultur e and natural

resour ce management com petence centre. In term s of staff, this equates to one or tw o sector

econom ists and 20 project m anagers. About eight sector specialists cover all aspects of ARD&FS.

3

Estimate based on th e value of Financial Cooperation in 2009(http://w ww.bmz.de/de/m inisterium/ zahlen_fakten/Bilaterale_ODA_nach_Instrum enten_und_Laendern_2009_i

m_Detail.pdf).
http://www.bmz.de/de/ministerium/zahlen_fakten/Bilaterale_ODA_nach_Instrumenten_und_Laendern_2009_im_Detail.pdfhttp://www.bmz.de/de/ministerium/zahlen_fakten/Bilaterale_ODA_nach_Instrumenten_und_Laendern_2009_im_Detail.pdfhttp://www.bmz.de/de/ministerium/zahlen_fakten/Bilaterale_ODA_nach_Instrumenten_und_Laendern_2009_im_Detail.pdfhttp://www.bmz.de/de/ministerium/zahlen_fakten/Bilaterale_ODA_nach_Instrumenten_und_Laendern_2009_im_Detail.pdf


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Com petence centr es support the operational teams and ar e responsible for all aspects not directly

rel ated to a specific countr y/project. In addition ther e are dedicated pr oject teams or ganised on a

regional basis that m anage the individual projects.

When KfW is assigned a project that the r ecipient countr y has agreed with t he BMZ, it has anopport unity to reject it i f i t feels development ally sound and feasible . However, given

that Kf W s opinion (and potentially a feasibil i ty study) on a project serves as the basis for discussion

during the inter governm ental negotiations between representatives of the part ner countr y and the

BMZ, KfW is unlikely to r eject a pr oject unless ther e have been considerable changes. KfW wil l have

designed the pr oject, but BMZ m ay have defined constraints, e.g. the target group or m odality. Once

agreed, KfW and the local project executing agency (typically a l ine m inistry) enter into a financing

agreement r egulating the conditions that m ust be fulfi l l ed, what m ust be taken into consideration

during constr uction of the facil i ties and how the operating costs wil l be covered. The local project

executing agency is responsible for actuall y implem enting the pr oject. It put s supplies and services to

tender and m onitors the constr uction phases. KfW assists with th ese steps and keeps BMZ inform ed.

The flow of data start s and ends with KfW; BMZ s involvement in detailed project data is not as

significant given that it is neither the designer nor t he impl ement er of the pr oject. This system caters

for pr oject implem entation but does not pr ovide BMZ with detailed project data or suggest a strong

data relationship directl y between BMZ and recipient governm ents.

GIZ is a private com pany whose shares ar e wholl y owned by the Germ an governm ent but whose

m anagem ent is independent. GIZ was form ed in January 2011 via a politically driven m erger of thr ee

agencies that im plement GDC, i.e. Deutsche Gesellschaft fr Technische Zusamm enarbeit (Germ an

Agency for Technical Cooperation, GTZ), Internationale Weiterbildung und Entwicklung (Capacity

Building Int ernational, InWent) and Deutscher Entwicklungsdienst (Germ an Development Service).

Approximately 65% of GIZ comm issions are fr om BMZ, with a sm all shar e from the AA. As a private

company, GIZ also work s for other donors, for example im plem enting projects funded by the

European Comm ission.

Whilst in theor y there is l i tt le difference between, for example, the United States Agency for

International Developm ent (USAID) subcontr acting work t o a private firm or non- governm ental

organi sation (NGO) and BMZ subcont r acting w ork t o GIZ, the r eality is significant ly differ ent. GIZ is

comm only mistaken for an arm of the Germ an governm ent because of several factors. GIZ comm only

has a greater presence in recipient countries than BMZ, and certainly has m ore staff on the gr ound.

GIZ also pr ovides significant policy advice to BMZ at headquar ter s level. So, whilst GIZ is not official lya donor its r ole in the negotiation and execution of development cooperation m eans that is often

perceived as one. However, it s use and r eporting of data is not integrated into t hat of BMZ in t he same

way as their staff.

Focussing on agricul tur e and food secur ity, GIZ is split int o sectoral t eams. For exampl e, the division

on Agricultur e, Fisheries and Food supports 150 projects with differ ent them es. Topic areas

repr esent GIZ internal or ganisation, designed to respond to th e changing mark et for their services.

Wh ARD& FS, other s ar e

outside, e.g. projects on cl im ate change. GIZ also channels GDC support for research institut es such

as the CGIAR. Technical sup port associated with sect or budget suppor t is also done on a

commission/project basis.


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Focussing on rur al development , the appropriate BMZ departm ent has approxim ately four staff

whereas GIZ has approxim ately 100 staff in this field, m ost of whom are wor king in advisory roles t o

BMZ. Approxim ately 60 people from GIZ work f or BM Z as contr actors on tasks such as designing

policies.

GDC also uses many other impl ementing agencies with roles that separate th em fr om pr ivate

companies and NGOs. Some, for example, Deutsche Investitions und Entwicklungsgesellschaft (DEG),

Centr e for Inter national Migration and Development and the Bundesanstalt fr Geowissenschaften

und Rohstoffe have expert ise in pr ivate-sector investm ent, m igration and geological sciences,

respectively.

Other s, e.g. political fou ndations, NGOs and chur ches, may cover several f ields but often have specific

rol es. All r eceive funding in the order of hundr eds of m il l ions of eur os. For example, political

foundations receive funding for t he sustainable prom otion or establishm ent of democr acy and civil

society. Whist t here is not the scope to investigate these additional actors, m uch of the analysis is

expected to be relevant to them as well.

BMZ is r esponsible for two t hirds of Germ an ODA. Several other m inistries also have aid policies and

spending. Notable am ong these is the AA, which was r esponsible for 9% of Germ an ODA

m ill ion). In term s of ARD&FS spending, the AA is responsible for shor t- term hum anitarian aid but not

food aid, responsibil i ty for w hich is r etained by BMZ. The AA and BMZ infor m each other about

intended projects but this is done at the policy level and AA and BMZ do not share an aid data system .

The Bundesminist erium fur Um welt, Natur schutz und Reaktor sicherheit (Federal Ministr y for theEnvironm ent, Nature Conservation and Nuclear Safety) and the Bundesminister ium fr Ernhr ung,

Landwirt schaft und Verbr aucherschutz (Federal Minist ry of Food, Agricul tur e and Consumer

Protection, BMELV) are the other m inistries involved in ARD&FS. BMELV provides , m ainly

for research institutes.4 A recent agreement h eralds growing cooperation between BMZ and BMELV

rel ated to the f ood securit y agenda.5 As with th e AA, these ministr ies also maintain separate data

systems.

GDC reports t o several com m ittees, both parl iamentar y and budgetary, providing basic data on

cur ren t and plann ed expenditu r e. GDC also m akes basic aggregate data available to civil society and

the wider public. Project- level inform ation can som etim e be gathered fr om t he websites of GIZ and

KfW. However, both are for bidden from supplying data to civil society or r ecipient governm ents

without BMZ s expl icit perm ission.

A major GDC comm itm ent to ARD&FS spending is provided via funding to m ult i lateral or ganisations.

GDC s contr ibution to th e European Developm ent Fund and Eur opean Union budgets accounted for

4 http://ww w3.imper ial.ac.uk/africanagricultur aldevelopment/r esources/europeanactivity/donorprofi les/

germany5 http://ww w.bmelv.de/SharedDocs/Pressemitteilungen/2010/095-AI-Niebel-Welternaehrung-

Entwicklungszusammenarbeit.html
http://www.bmelv.de/SharedDocs/Pressemitteilungen/2010/095-AI-Niebel-Welternaehrung-Entwicklungszusammenarbeit.htmlhttp://www.bmelv.de/SharedDocs/Pressemitteilungen/2010/095-AI-Niebel-Welternaehrung-Entwicklungszusammenarbeit.htmlhttp://www.bmelv.de/SharedDocs/Pressemitteilungen/2010/095-AI-Niebel-Welternaehrung-Entwicklungszusammenarbeit.htmlhttp://www.bmelv.de/SharedDocs/Pressemitteilungen/2010/095-AI-Niebel-Welternaehrung-Entwicklungszusammenarbeit.html


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14.7% of GDC ODA in 2009. A shar e of th is wil l h ave been spent on ARD&FS and is lik ely to have been

factored into GDC policy decisions on how to support the ARD&FS sector. Simil arl y GDC contr ibutes

funding to other m ult i laterals such as the Inter national Fund for Agricultur al Developm ent.

The Germ an gover nm ent to ARD& FS under AFSI. GDC

report s aggregate data under AFSI. A BMZ sector depart m ent is taking th e lead on encouraging

operations to achieve the comm itted level of spending but there does not appear to be a form al

process and the impacts on the project design team s of the impl ement ing agencies is uncertain.

International agr eements such as AFSI do not have their own budget l ines which woul d give the BMZ

policy m uch m ore direct contr ol over spending.

Germ an policy comm itm ents to the aid effectiveness agenda. For

exam ple, the harm onisation and the division-of- labour agendas mean that GDC is under pr essure to

reduce both the number of countries it work s in and the num ber of sectors in each country, and to

reduce the scope for ARD&FS spending if this im pacts the num ber of recipient partner s with ARD&FS

as a priorit y sector. Delegated cooperation affects t he report ing flow of aid data. Modalities seen as

supportive of enhanced aid effectiveness such as general budget support , sector budget suppor t,

pooled funds and sector- wide approaches all incr ease pressur e on GDC to reduce aid delivered on a

project basis. The differential suit abil i ty of different m odalities for differ ent sectors ther efore impacts

the types of project that GDC implem ents and the sectors it can address. As a curr ent example, the

resul ts/value-for -m oney agenda may current ly be negatively im pacting ARD&FS spending as

appropriate indicators of im pact are less well developed than they are for al ternative sectors such as

health or education.

GDC str uctur e m ust be underst ood on both a form al (segregated) and inform al (integrated) basis.

Form ally, there are few links and opportunit ies for inform ation exchange between BMZ and

im plement ing agencies. Inform ally, they are m uch m ore integrated, iterating policy, knowledge,

project design and spending decisions between them. As they are not form alised, m any of the data

and policy relationships are very indirect and are l ikely to pose substantial difficulties for identifying

the im pact of changing policy in term s of changing spending patterns.

The operational r equirem ents of providing aid to ARD&FS as well as the different user s of data

suggest that th ere are a wide variety of needs for different source and system s for aid data.

In addition, we have identified a wide range of differ ent sour ces of policy. This case study contin ues in

the next section by outl ining som e of GDC s policies in ARD&FS over the l ast 30 years.


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ARD and food-secur ity policies in

German development cooperationGDC operates with a set of pr iorities that are spelt out in the coalition agreement between th e main

political parties that form the governing coalition. In term s of sectors:

development, cl im ate protection, environm ental protection and resource management as well as

econom ic co-operation (expansion/prot ection of the pr ivate sector, e.g., thr ough PPP, micro- finance

fight clim ate change and hunger m ust be vigorously implem ented and designed to m eet futur e6

Several components of ARD&FS are m entioned and the agreement also includes:

advocate sustained intern ational action to support agricul tur e and rur al areas in developing

This agreem ent applies across all m inistries r esponsible for GDC but t he effect of this political

guidance is unclear.

BMZ work is also al igned on a number of issues. Curr ently these are: business, debt rel ief,

education, energy, food, good governance, health, human rights, peace building, poverty, protectingthe clim ate, protecting th e environm ent, rur al development and social security. Several of these

suggest strong suppor t for the ARD& FS sector w ith BM Z. They tend to be split into several

subsectors, e.g. food compr ises stances on hunger, agricultu ral policy coherence, agricultu ral

research and food aid.

These them es have policy documents underlying them to elaborate t he BMZ position. For example

ther e is a paper on food security and rur al development.7 The BMZ ru ral developm ent concept shares

the same issue paper as food security and is split int o prom oting rur al development and ownership,

econom ic promotion, decentr alisation, land and agricultu ral r eform , sustainable management of

natur al r esources, gender equality and drugs policy.

The new concept for r ur al development and food security has four m ain topics: agricult ure, natur al

resour ces, social infr astruct ur e, and institutions and policy. The previous rur al developm ent str ategy

was produced in 2001. The new Germ an coalition governm ent br ought r ural development back as a

political prior ity and this m eant that ther e was a need for a new concept paper.

6 http://ww w.fdp-bundespartei.de/f i les/363/091024-k oalit ionsvertr ag-cducsu-fdp.pdf7

Abridged version in Englishhttp://www.bmz.de/en/publications/type_of_publication/information_flyer/ information_brochures/BMZ_Informat

ionsbroschuere_06_2010.pdf
http://www.fdp-bundespartei.de/files/363/091024-koalitionsvertrag-cducsu-fdp.pdfhttp://www.bmz.de/en/publications/type_of_publication/information_flyer/information_brochures/BMZ_Informationsbroschuere_06_2010.pdfhttp://www.bmz.de/en/publications/type_of_publication/information_flyer/information_brochures/BMZ_Informationsbroschuere_06_2010.pdfhttp://www.bmz.de/en/publications/type_of_publication/information_flyer/information_brochures/BMZ_Informationsbroschuere_06_2010.pdfhttp://www.bmz.de/en/publications/type_of_publication/information_flyer/information_brochures/BMZ_Informationsbroschuere_06_2010.pdfhttp://www.fdp-bundespartei.de/files/363/091024-koalitionsvertrag-cducsu-fdp.pdf


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ARD&FS is split across several BM Z sector depart m ents, prim arily Rural Development and one for

Developmental (longer -t erm ) Food issues. BMZ has several other depart m ents t hat cover aspects of

ARD& FS, e.g. Water , Clim ate, Social Sector s and Finance each of which has it s own policies.

Concentr ating on ru ral development and food securit y, during t he 1980s BMZ had two m ain budget

lines for ARD&FS: Rural Development and Food Securit y. In 2005, the Food Secur ity depart m ent w asspl i t into a development- oriented departm ent and a department for shorter -ter m and emergency

assistance. The evolution of departm ental str uctur e reflects changing policy trends within BM Z. The

depart m ental str uctur e also influences the types of policies that are created. For exam ple, a separate

emergency food aid policy now exists.8 This policy descr ibes the budget lin es, the existence of fixed

countr y all ocations and som e of the curr ent str ategy positions.

These policies, issues papers, approach papers and simil ar docum ents are pr oduced by the BMZ s

sectoral departm ents. They appear to serve as inform ation or advert ising for the operations

depart m ents to use when com m issioning projects and guidance for th e implem enting organisations

when designing projects. They may well have a greater impact on pr oject quality than on the volume

of flows. Notably, they are actually wr itten by the im plem enting organisations, in this case GIZ staff on

contract.

In term s of their impact on spending, because they are not directly driving a process of allocation, we

m ight expect to see a (non-l inear) uptake a few years after the new str ategy is produced, and a

change in actual disbur sement a few years after that due to t he lag between designing and

im plement ing projects. It rem ains unclear whet her anyone monitors whether a change in policy

resul ts in changed patter ns of spending.

During t he course of the study, obtaining historical per spective at BMZ was difficult . This refl ects

their r ole as a forwar d-l ooking com m issioning and policy agency. When combined with th e indirectnatur e of policy influence, it also m eans that it was not possible to str ongly identify any past policies

to tr ack against curr ent spending.

The implem enting agencies also maintain policies and they were able to pr ovide a longer- term

overview of trends wit hin the ARD&FS sector.

GIZ pol icy themes have no formal al location role. However, as a form of advertising what they are

work ing on, they can be a useful guide to the technical cooperation aspect of GDC policy in pr actice.

For example, the GIZ rur al development them e,9 which includes several subthem es, e.g. the

agricult ural policy and rural areas subtheme,10 has strong parallels with t he BMZ rural developm ent

str ategy. Infor m all y, GIZ policies may have a bearing on BMZ policy.

These latest policies and the projects t hey describe could be u sed to pr ovide evidence of the shift in

policy away from the lar ge integrated rur al developm ent pr ojects that pr evailed unti l the early 1990s.

These were scr apped politicall y when acting at the m acro level becam e unfashionable in development

policy. This model of GDC support t o ARD& FS is now seen as old- fashioned and characterised as a

perform ance failur e. However, despite the policy change, several inform ants r eported that very

8

http://www.bmz.de/en/publications/type_of_publication/strategies/konzept138.pdf9 http://www.gtz.de/en/themen/863.htm10 http://www.gtz.de/en/themen/laendliche-entwicklung/33334.htm
http://www.bmz.de/en/publications/type_of_publication/strategies/konzept138.pdfhttp://www.gtz.de/en/themen/863.htmhttp://www.gtz.de/en/themen/laendliche-entwicklung/33334.htmhttp://www.gtz.de/en/themen/laendliche-entwicklung/33334.htmhttp://www.gtz.de/en/themen/863.htmhttp://www.bmz.de/en/publications/type_of_publication/strategies/konzept138.pdf


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simi lar pr ojects are now cal led ' rur al r egional d

departments such as Regional Economic Development, and Government and Civil Society.

Furt herm ore, many of the projects in the style of integrated rur al development ar e now carr ied out

under t he auspices of emer gency and hum anitarian aid.

KfW s perspective on the evolution of GDC policy towards ARD&FS is slightl y different as a result of

specialising in f inancial cooperation pr ojects as opposed to technical cooperation. They report that

during t he 1980s they tended to support agr icultur al production. In 1992, the Eart h Summ it opened up

new areas such as biodiversity, erosion and forestr y management . The shift w as also l inked to

shift in mindset away from integrated r ural developm ent projects, something that star ted in the

1970s. The Millennium Development Goals m ight support t he resur gence of a mor e traditional

concept of r ur al development spending.

Despite these shifts, KfW r eports that t he actual projects carried out in r ur al development h ave not

changed significantly for 30 years, although th e coding and concept that they are part of m ay have.

Hence, the change is som etimes m ore in the labell ing of inter ventions rath er th an in their substance.

KfW staff expressed the view th at their volum e of rur al development spending has rem ained relatively

unchanged and their data br oadly confirm ed this. Yet, due to the expansion of their oth er ar eas of

investm ent, rur al development as a share of their overall por tfolio m ay have declined.

In term s of influencing spending, KfW felt t hat it was in a position to put pr essure on BMZ come up

with m ore ru ral development pr ojects but that t hey would do so only if they thought th at BMZ

prior ities were changing in a supportive direction as it takes significant t ime and effort to identify and

develop new pr ojects. ARD was not explicitly included in the l atest Germ an str ategy for Africa (which

prior itises governance, private sector and water ) so this prevents KfW fr om actively scoping new ARDprojects.

Several other factor s also milit ate against KfW increasing its support to ARD&FS. Agricultur al

support is approximately 3% ) of KfW s overall disbursem ents and the average ARD&FS

project is between 10 m ill ion, whereas

m ill ion. Thus, growt h in spending is easier t o achieve in other sector s. Secondly, much of KfW s

financing is typicall y suited to m iddle-incom e countries (MICs), e.g. large-l oan financing, therefore

expanding agricultur al support is difficult for KfW to defend politicall y as tar geting the poorest

countr ies is problem atical. Both of these examples dem onstrate pr actical constraints on ARD&FS

policy.

A m ajor component of policy influence on GDC ARD& FS spending is that which is dr iven by the

biennial agreem ents signed with r ecipient partner countries. This impact is particular ly hard to

quantify as the roles and influences of the r ecipient part ner governm ents and GDC are not k nown.

However, what is cl ear is that different countr ies (and regions) have different pr iority sectors. For

exam ple, in Nort h Africa GDC focuses on the environm ent (with w ater and r enewable energy as major

sectors), education and economic r eform .11 At the countr y level, Mali has prior ity sectors of

11 http://ww w.bmz.de/en/publications/topics/countries_regions/konzept168.pdf - see page 13.
http://www.bmz.de/en/publications/topics/countries_regions/konzept168.pdfhttp://www.bmz.de/en/publications/topics/countries_regions/konzept168.pdf


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agricult ure, decentr alisation and water.12 Impor tantl y for ARD&FS, very few countr ies (e.g. Kenya,

and the Lao ) have rur al development or agricultu re as

prior ity sector s. This m ight severel y constr ain the scope for BMZ to im plem ent policy on ARD&FS but

it also m eans that GDC spending on ARD& FS can be influenced by prior ities of r ecipients th at are n ot

included in curr ent BMZ policy.

GDC s spending on ARD& FS is also subject to several other policy influences. The AA maintains its

own policy on em ergency food aid, hum anitarian assistance and hum an rights assistance. Long-t erm

intern ational agreem ents and comm itm ents, such as the obligation to support th e CGIAR and the

Food Aid Convention , have str ictl y defined cont r ibution s and prevent r apid changes in GDC policy. The

World Food Sum m it on Food Securit y in Novem ber 2009 and the L 'Aquila G8 Summ it in Ju ly 2009 led

to a com m itm ent by GDC of appr oxim at to ARD& FS. Sim ilar l y, GDC

contribut ions to m ult i lateral institut ions are influenced by the changing policies of mul ti later al

organisations (and are difficult t o tr ack).

It should also be noted t hat, so far, we have only considered factors int entionally designed to

infl uence policy and spending on ARD& FS. In real ity, spending is influence by many other exogenous

factors. For example, spending on food aid responds to the num ber of droughts or other em ergencies

that happen in a part icular year. These factors m ay easily outweigh the im pact of changing policies.

In sum m ary, GDC effort s towar ds ARD& FS are dr iven by a r ange of policies. Som e policies, such as

comm itm ents to intern ational agreements and political announcements, are very visible. Other s, such

as the agreements with par tner s, are less visible. However, the im pact of both is easy to underst and.

The role of BMZ policy docum ents and the policies of the implem enting organisations appear to beless direct.

Different t ypes of policies also change at different speeds. The pr evious rur al developm ent str ategy

lasted 10 years. This may refl ect an incr ease in 2001 in the pr iority accorded to r ur al developm ent

compared w ith other sectors, foll owed by a decline and another increase in 2011. The new policy may

also emphasise different aspects of r ur al developm ent, i.e. a change in composition of GDC support to

the sector.

During t he study it proved difficult to identify past BMZ policies other than thr ough anecdote and

discussion. This notwithstanding, policy changes to look for when examining t he data include:

A reduction in spending on large- scale integrated rur al development projects during t he 1980s; A reduction in core agricul tur al spending during the 1980s; A shift towards environment al/cl imate aspects of ARD&FS from 1992; An increased em phasis on the hum anitarian and emer gency aspects of food from 2005; and The e Aquila com m itm ent fr om 2009

onwards.

12 http://www.gtz.de/en/weltweit/afrika/mali/1341.htm
http://www.gtz.de/en/weltweit/afrika/mali/1341.htmhttp://www.gtz.de/en/weltweit/afrika/mali/1341.htm


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Aid data in German development

cooperationIn previous sections we ident ified a wide variet y of all ocation and policy processes present in GDC.

Each of these activities has different data needs, reflecting the different users and different tasks.

This section gives m ore detail on t he various data systems in operation. The hypothesis is that the

different needs and uses of data drive the pluralit y of systems in operation.13

This section describes what appears t o be the prim ary system in use by BMZ for both sector

depart m ents and operations departm ents. This system also appears t o be the base from which m any

of the other aid-data system s are calculated. It r ecords data at the project level, detail ing the year,

recipient, sector, financial details, form of assistance and implem enting agency, and provides a brief

description of the project.

The database uses OECD-DAC purpose codes t o identif y the sect or. Dat a for 2008, 2009 and 2010

were m ade available for t his study. Despite the short tim e fram e of the series, several evolutions are

noticeable. These include the addition of new thematic m arker s, greater financial detail and a shift

fr om t wo- and five-digit OECD-DAC sector codes to only five-digit OECD-DAC sector codes.

To com pile the database, BMZ dr aws on data provided by the im plem enting agencies. Data appear to

be entered at the planning stage of the project preparation cycle, i.e. before a firm comm itm ent is

m ade by BMZ. Leaving aside the implications for recipient str ategies, this expands the users of the

dataset to include those interested in planning of spending and also highlights that som e fields in thedataset mu st be updated when new inform ation becom es available, e.g. if the value or approach of a

project changes between the planning stage and comm itm ent.

It is unclear who is responsible for coding projects to sectors. The indication is that it m ay be done by

various actors w ithin BM Z and implem enting agencies. Perh aps, projects are initial l y enter ed by BMZ

operations staff and then updated by the countr y staff of the im plem enting agencies. Given th is, we

can expect som e variation in coding, as this based on individual judgements and differ ent staff m ay

have different incentives, viewpoints and levels of kn owledge of specific projects and different

interpr etations of the codes. For example, several people report ed that it was no longer politically

acceptable to code anything as r ur al development. Others r eported that they just use the codes that

they are used to and that ther e might not be a strong incentive to get the code right. These incentives

are l inked to th e use of the dataset. They suggest t hat fine- grained sector accur acy is not essential.

The dataset r ecords two types of comm itm ents. For pr oject im plem entation purposes, the dataset

tracks comm itments (zusage) but there is also a planning system (pl annu ng) which is the 'guess at

the start of the year'. Presum ably this means that the dataset is used for aid- allocation decisions.

The database as seen does not r ecord project disbur sement s so is unlik ely to be the only financial

tool available at t he m inistry. This means that the database is not l ikely to be used in collaboration

with r ecipient country ministr ies or to m easure the volum e of curr ent support flows at any one time

13 For a fur ther discussion of aid measurem ent see the synthesis report (chapter 2) on measuring aid f l ows.


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as the entire project value is recorded at the date of comm itm ent, even though it m ight r epresent at

loan ru nning over 30 years. There are argum ents both ways over wh ich approach is mor e accurate:

funds l isted as disbursed can just be sat in th e account of a m ult i lateral agency for a year or two, so

comm itments m ay be a m ore consistent measure.

The key point here is that the design of this aid- data system hints at wh ether it is m ost relevant for

pkp2__ understanding aid to ard and food security: germany

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