Parliaments are at the centre of the domestic accountability cycle. Where aid provides financial support based on domestic policy frameworks, donors have an impact on the policy formulation and implementation process. This is especially the case for ‘development policy lending’, programmatic aid modalities, and all aid that has as its explicit aim any kind of ‘governance’ outcome. Without the oversight of parliaments and elected bodies at sub-national levels on the nature of policy engagement, aid is in danger of subverting domestic accountability. In this regard, the IPU, in collaboration with the Capacity Development for Development Effectiveness (CDDE) Facility, has developed a useful guide for parliamentarians on their role in ensuring development effectiveness.

In the past, the lack of transparency with regard to operations funded by multilateral and bilateral institutions, as well as the lack of transparency in the domestic budget process, has effectively undermined the role that the legislature should play in accountability and anti-corruption efforts. Current initiatives to ensure both transparency and the active involvement of parliamentarians in country assistance strategies, as well as in poverty reduction support programmes, are seen as essential to create transparency on policy, budget allocation and implementation decisions. For budgetary aid transfers that increasingly rely on domestic processes, the oversight and accountability function of the parliament cannot be overemphasised. Accountability in development aid has been low vis-à-vis taxpayers in donor countries, due to the ‘overseas’ nature of aid (See Discussion Paper: Poverty, Aid and Corruption, Transparency International, 2007).   

At the same time, beneficiaries in recipient countries – especially where they are poor and marginalised populations – are almost by definition not well positioned to hold their own governments to account, and even less so the donor governments. Even at present, highly aid-dependent countries face a ‘mixed accountability’ situation. It is not unusual for some governments to report and account to their foreign donors in forums such as World Bank-led Consultative Group or Paris Club meetings (on debt) in greater detail than they do to their own citizens through public accounts. This follows on efforts in “conditionality”, particularly economic conditionality, where donors have sought to hold recipients to account. Economic conditionality, particularly as practiced in the 1980s and early to mid-1990s as a one sided accountability, is now recognised as both ineffective and undesirable.

The Paris Declaration on Aid Effectiveness (Ownership, Harmonisation, Alignment, Results and Mutual Accountability), the subsequent Accra Agenda for Action (AAA), and the Busan Fourth High Level Forum on Aid Effectiveness (Busan HLF4) are milestones in anchoring the commitments and obligations of partnership within a mutual accountability framework that recognises that effective aid must align itself to country-led development strategies. Mutual accountability aims to place the aid relationship on a two-way contractual basis, where donors commit to providing effective aid and recipients commit to using aid well. This governance result can only be achieved through mechanisms rooted in public accountability as the diagram below demonstrates:

The Accra Agenda for Action sets out a clear commitment to ensure that legislatures will no longer be sidelined in exercising oversight of the use of development aid and agrees to broaden country-level policy dialogue on development:

“We will engage in open and inclusive dialogue on development policies. We acknowledge the critical role and responsibility of parliaments in ensuring country ownership of development processes. To further this objective we will take the following actions:

a) Developing country governments will work more closely with parliaments and local authorities in preparing, implementing and monitoring national development policies and plans. They will also engage with civil society organisations (CSOs).

b) Donors will support efforts to increase the capacity of all development actors — parliaments, central and local governments, CSOs, research institutes, media and the private sector — to take an active role in dialogue on development policy and on the role of aid in contributing to countries’ development objectives.”

The Busan Fourth High Level Forum on Aid Effectiveness builds upon the developments of both the Paris Declaration and the Accra Agenda by recognising the widening group of development actors and forging a new global partnership to embrace diversity and to recognise the distinct roles that all stakeholders can play in development:

"We reaffirm our respective commitments to scale up development co-operation [and] we will aim to increase independence from aid... As we partner to increase and reinforce development results, we will take action to faciliate, leverage and strengthen the impact of diverse sources of finances to support sustainable and inclusive development, including taxation and domestic resource mobilisation, private investment, aid for trade, philanthropy, non-concessional publice funding and climate change finance. At the same time, new financial instruments, investment options, technology and knowledge sharing, and public-private partnerships are called for.

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Parliaments and local governments play critical roles in linking citizens with governmnet, and a) accelerate and deepen the implementation of existing commitments to strengthen the role of parliaments in the oversight of development processes, including by supporting capacity development backed by adequate resources and clear actions plans; b) further support local governments to enable them to assume more fully their roles above and beyond service delivery, enchancing participation and accountability at the sub-national levels."

Thus, mutual accountability for aid effectiveness, country ownership, and increased partnership co-operation and co-ordination are increasingly central elements of the agenda for international assistance. 

Corresponding with this emphasis on national ownership is an increasing pressure on governments for transparent budget processes to account for the disbursal of direct budget support.

This international pressure for budget accountability places heightened demands on parliaments’ oversight functions to ensure the efficacy and transparency of government expenditures. The success of any economic development strategy depends on accountable and responsive institutions. As governments develop their own development agendas, it is important that parliaments play a key role in shaping their country’s economic and development strategies. Parliaments are the representative institutions and, as such, they can both ensure that the interests of a broad spectrum of society are included in debates on a country’s economic future, and manage the debate on contentious issues through institutionalized committee processes.

It is also important to note the donor parliament and donor government relationship and the donor parliament and partner or recipient country parliament nexus. 

To help deliver aid effectiveness work needs to be done, not only in recipient countries but also in donor countries, if the parliament is to be actively be engaged in the different aid cycles, from policy-making to implementation and review. Donor parliaments should, for instance, monitor the donor government's effective adherence to, and action on, the aid effectiveness agenda. They should, inter alia, urge donor governments to engage at the beginning of the aid cycle with partner parliaments, something which is still too rarely done. Recipient country parliaments too often remain marginalised on development support agreements and implementation, despite their importance for citizens. 

In countries where local accountability mechanisms have not yet reached maturity, donor parliaments could also advocate for part of the aid to be dedicated to reinforce local accountability institutions such as court of auditors and parliamentary audit mechanisms, including Supreme Audit Institutions - this is particularly relevant when direct budget support is provided. This is not just in the interest of seeing democratic governance flourish, but also simply in the interest of seeing better aid results and the effective, and efficient, use of donor public funds.