A hit to DFAT accountability

| October 4, 2020

The abolition of DFAT’s Office of Development Effectiveness (ODE) is a bad decision. This development is made worse by the non-transparent way the decision was made.

More than three quarters of the Department of Foreign Affairs and Trade’s (DFAT) budget is development cooperation.  At more than $4 billion each year, this is still a sizeable sum, even if it is the lowest ratio of national income ever.

Australians don’t see first-hand how this money is spent.  Many wrongly assume it is doled out as cash to corrupt governments, or wasted.  Successive governments have recognised their duty to inform taxpayers of what this spending achieves.  This is integral to community support for the program.

Alexander Downer understood this, and oversaw the creation of the Office of Development Effectiveness in 2006 with much fanfare.  It was an innovation subsequently applauded and awarded as Commonwealth best practice.

Prior to the 2013 election, Shadow Foreign Minister Julie Bishop argued relentlessly for greater development cooperation scrutiny and higher performance standards.  In a Development Policy Centre speech in 2012, she argued that maintaining public confidence in Australia’s aid program required greater transparency.

She said, “This is why the Coalition remains committed to more scrutiny of the multi-billion aid program and to higher standards of effectiveness and to performance benchmarks.”  The abolition of ODE undermines this.

It also undermines DFAT’s bigger claims to better funding.  DFAT’s persistent failure to produce compelling evidence that would persuade central agencies and the Expenditure Review Committee of Cabinet has led to a chronically underfunded department, cannibalising itself.

Staff were informed of ODE’s abolition several weeks ago. Unfortunately, the Parliament and the public were not – presumably DFAT did not see their “need to know.” Pressed on the issue in the Joint Standing Committee on Foreign Affairs, Defence and Trade, officials claimed that this is merely a restructuring of responsibilities, and that the work of ODE will continue under the direction of the department’s chief economist.

To test that, Parliamentarians should ask highly detailed “before and after” questions about the staffing devoted to independent evaluation and about the nature and number of products to be produced.

ODE not only conducted strategic evaluations identifying high-level patterns of performance.  Critically, it vetted reporting on the quality of multi-year activities in real time and oversighted the quality of annual reports produced by country desks.  Word has it that each of these activities is to be significantly downgraded.

ODE’s relative independence was critical.  This was bolstered through an Independent Evaluation Committee, chaired by a former World Bank vice president.  Failure to replace the retiring chair at the end of 2019 was a harbinger of recent decisions.  DFAT has advised the Parliament that the Committee remains in place.  Members of Parliament may want to validate that assurance.

With the demise of ODE, the possible end of the Independent Evaluation Committee, and the suspension of DFAT’s Annual Evaluation Plan due to COVID-19, the department’s evaluation policy is now defunct.

Perhaps none of this matters.  One argument for ODE’s abolition is that the whole development cooperation business is over-engineered.  Busy diplomats in particular tend to have little shrift for complicated program delivery processes.

Fair enough, but ministers tend to want processes that keep them out of trouble.  Going light on the performance side is risky.  Big problems may go unrecognised and unresolved and suddenly emerge as major embarrassments.

Development cooperation is now a knowledge, policy and systems business.  Getting this right is hard work and difficult to track.  It requires the careful assembly of reliable evidence.

ODE was a knowledge creator, consistently if inconveniently pointing to shortfalls in departmental capability.  Its seminal work on violence against women revealed a much bigger problem than realised, with major economic and social impacts.  This led to policy change in Australia and internationally.

It is ironic that DFAT’s abolition of ODE is happening in the COVID-19 era, when governments are relearning the value of transparency, expertise, and evidence-based policy making.  This decision is at odds with those principles.

The department will argue that it will continue to undertake performance reviews.   It is true the majority of project/program level reviews were not done by ODE, but nor are they independent.

Departmental line areas and their delivery partners have incentives to talk up success.  Independent oversight and quality control are essential.  Remove that function and many will award themselves an extra gold star.

The performance assessment of international programs, whether they be diplomatic, developmental, or defence related, throws up special problems because the programs are largely delivered offshore. DFAT is opting for less independence and rigor when more is needed.

However, there are solutions.  DFAT’s Audit Committee might beef up its performance audit functions.  Additionally, the Parliament might mandate and resource the Australian National Audit Office to pick up where ODE left off.

The Parliament and public would gain from a dedicated, expanded, ANAO international relations evaluation program across DFAT, Defence, and the international activities of Home Affairs.

The result could yet be one step backwards, two steps forward.

This article was published by the Australian Institute for International Affairs.

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