Supply-driven approach to development is not forward-looking

This week marks the start of a series of events organized by the Danish Ministry of Foreign Affairs that aims to engage various Danish stakeholder groups in discussions about the future of Danish development cooperation. The preliminary calendar for this initiative includes a mixture of meetings such as closed sessions with private sector actors, public debates and discussions at educational institutions, and two meetings with civil society organisations. The stated goals of the process are to discuss how Denmark’s public investments in developing countries can generate the most benefits and to debate the motives and future priorities for Danish development cooperation.

The ongoing roadshow is not the only one of its kind. In Germany, the development ministry has initiated a tour to foster dialogue around the themes of a reference document for the future of German development policy elaborated in 2014 and 2015 in consultation with a broad range of stakeholders. Events organized across all German federal states are designed to communicate the relevance of the sustainable development agenda to a broad public and encourage action, both by sensitizing individuals to their development roles as consumers and promoting new international partnerships involving actors such as municipalities.

These tours present an opportunity to highlight the connections between the Global Goals for Sustainable Development and national-level actions needed to implement them and can contribute to strengthening the societal basis for international cooperation efforts. This agenda is more explicit in the German case, as the Danish government has signaled a limited interest in exploring the domestic relevance of the Global Goals. At the same time, there is a risk that by using the forums as a platform for domestic interest groups to identify future development priorities, important lessons from the past on how to make development cooperation effective will be neglected.

A central lesson from decades of experiences in development cooperation is that international funding generates greater benefits for recipients when it responds to priorities that are formulated in the countries where it is disbursed. The recognition of the value of a demand-driven approach to development cooperation lies at the heart of the aid effectiveness agenda that has provided a reference point for OECD-DAC donor agencies over the last decade. While Denmark’s decentralization of decision-making in aid administration reflects an understanding of the importance of being sensitive to local contexts, Danish aid continues to reflect a mixture of Danish and recipient country interests.

The risk of backsliding to an approach to development cooperation that privileges donor self-perceptions of added value over the needs articulated at the level of implementation is clear in light of the priority the Danish government attaches to soliciting input from private sector actors in the formulation of its new development policy strategy. There is little doubt that private sector actors in Denmark and elsewhere are already highly relevant development actors through their core business activities. They can make a significant contribution to the achievement of the Global Goals by providing financing, expertise, and technology to address a variety of challenges. Moreover, the export-oriented business sector has historically been an important constituency supportive of a robust Danish aid program. In light of the dramatic recent aid cutbacks in Denmark, however, it is critical that reflections on a future development strategy reach beyond the promotion of domestic interests and include ample consideration of how the Danish development assistance that remains can create the most value for beneficiaries in developing countries.

A balanced approach to identifying future Danish priorities should incorporate input from numerous sources. First, lessons learned from within the aid administration at headquarters and in the field should play a central role in highlighting areas where Denmark can build on existing strengths. Second, the demand for Danish development cooperation should be addressed by integrating partner country perceptions of Denmark’s comparative advantage as a donor. Partner country preferences are diverse and may be consistent with Danish thematic priorities. Apart from expressing support for investments in specific sectors, partners remain concerned about the quality of aid, encouraging donors to align development cooperation with government programmes and to provide funding in a predictable manner. Finally, debates on future directions for Danish aid should be informed by a consideration of why Danish bilateral channels for delivering aid are more appropriate than alternative platforms for achieving development goals. In this context, Denmark’s future commitment to contribute to complementarity and a division of labour among EU donors and the prospects for strengthening multilateral development cooperation deserve special attention.