• News
    • Latest news
    • News search
    • Health
    • Finance
    • Food
    • Career news
    • Content series
    • Try Devex Pro
  • Jobs
    • Job search
    • Post a job
    • Employer search
    • CV Writing
    • Upcoming career events
    • Try Career Account
  • Funding
    • Funding search
    • Funding news
  • Talent
    • Candidate search
    • Devex Talent Solutions
  • Events
    • Upcoming and past events
    • Partner on an event
  • Post a job
  • About
      • About us
      • Membership
      • Newsletters
      • Advertising partnerships
      • Devex Talent Solutions
      • Contact us
Join DevexSign in
Join DevexSign in

News

  • Latest news
  • News search
  • Health
  • Finance
  • Food
  • Career news
  • Content series
  • Try Devex Pro

Jobs

  • Job search
  • Post a job
  • Employer search
  • CV Writing
  • Upcoming career events
  • Try Career Account

Funding

  • Funding search
  • Funding news

Talent

  • Candidate search
  • Devex Talent Solutions

Events

  • Upcoming and past events
  • Partner on an event
Post a job

About

  • About us
  • Membership
  • Newsletters
  • Advertising partnerships
  • Devex Talent Solutions
  • Contact us
  • My Devex
  • Update my profile % complete
  • Account & privacy settings
  • My saved jobs
  • Manage newsletters
  • Support
  • Sign out
Latest newsNews searchHealthFinanceFoodCareer newsContent seriesTry Devex Pro
    • News

    Bursting the banks: The need for aid transparency in resource-rich countries

    By Kathryn Joyce // 25 March 2011
    A diamond miner in Kono District, Sierra Leone. Photo by: L. Lartigue / USAID

    Can an influx of aid money ever be bad? According to a 2010 report from Transparency International, the risks of corruption and mismanagement of aid funding is very real.

    Working with several development and relief groups, TI’s researchers found that a sudden influx of aid into poor or disaster-stricken countries can actually worsen the situation, by “bursting the banks” or exacerbating corruption and power imbalances in economies already lacking in strong management infrastructure or transparency systems.

    It’s a scenario very familiar to transparency advocates in the oil, gas and mining sectors, where too often windfall profits in developing nations lead to increased corruption or conflict instead of an improved quality of life for citizens.

    With aid and with resource revenues, a government’s capacity to manage new inflows of money responsibly, and to distribute that money transparently, can make the difference in whether funds that ought to be a benefit leave countries better or worse off.

    “When it comes to accountability, many of the basic questions are the same for aid and extractive revenue flows,” says Vanessa Herringshaw, Revenue Watch director of capacity building and advocacy, “especially if aid comes as bilateral support, when funds arrive directly into government coffers.”

    The key questions are the same in both efforts: Does the amount governments declare that they’ve received match the amount that donors or companies claim was paid? And, how exactly is the money being allocated and spent?

    “To answer each of these questions,” says Herringshaw, “we need transparency: of agreements and contracts, of revenue flows to and from government, and of the impact of spending. Whether you’re dealing with private contracts or aid agency agreements, these are all public monies, and we have a right to know how they’re used.”

    Craig Fagan, TI senior policy coordinator, says: “When development funding is not brought into the national budget or it is kept in parallel projects, it is impossible to know whether it is helping the people and communities that need it most. In the same way, government revenues gained from extractive industries must be open and accountable to ensure that the nation’s wealth is benefiting its people rather than a small cadre of elites.”

    Resource wealth can also influence the aid climate directly, by providing the means for a country to move from aid dependency to self-funded development. But here too, only with the open management of income.

    “As has been seen,” says Fagan, “low levels of transparency in aid and natural resource wealth offer the perfect context for mismanagement and corruption.”

    Improved transparency can be a hard sell to donors and governments alike, but poor nations facing unexpected crises — or unexpected opportunities — must take the time to develop management capacity and strengthen systems for accountability so that they can steward their money well.

    What do you think? Please start a conversation by leaving a comment below.

    • Humanitarian Aid
    • Banking & Finance
    Printing articles to share with others is a breach of our terms and conditions and copyright policy. Please use the sharing options on the left side of the article. Devex Pro members may share up to 10 articles per month using the Pro share tool ( ).

    About the author

    • Kathryn Joyce

      Kathryn Joyce

    Search for articles

    Related Stories

    The Trump EffectWhat African experts say must change about US foreign aid

    What African experts say must change about US foreign aid

    Economic developmentFrom 'aid trap to 'brutal' cuts: African leaders confront a new reality

    From 'aid trap to 'brutal' cuts: African leaders confront a new reality

    Economic DevelopmentKenyan religious leaders roped in to tackle the country’s rising debt

    Kenyan religious leaders roped in to tackle the country’s rising debt

    Decoding Food Systems: Sponsored by CGIARClosing the loop: Transforming waste into valuable resources

    Closing the loop: Transforming waste into valuable resources

    Most Read

    • 1
      How low-emissions livestock are transforming dairy farming in Africa
    • 2
      Opinion: Mobile credit, savings, and insurance can drive financial health
    • 3
      Opinion: India’s bold leadership in turning the tide for TB
    • 4
      How AI-powered citizen science can be a catalyst for the SDGs
    • 5
      WHO names new directors in ongoing restructure
    • News
    • Jobs
    • Funding
    • Talent
    • Events

    Devex is the media platform for the global development community.

    A social enterprise, we connect and inform over 1.3 million development, health, humanitarian, and sustainability professionals through news, business intelligence, and funding & career opportunities so you can do more good for more people. We invite you to join us.

    • About us
    • Membership
    • Newsletters
    • Advertising partnerships
    • Devex Talent Solutions
    • Post a job
    • Careers at Devex
    • Contact us
    © Copyright 2000 - 2025 Devex|User Agreement|Privacy Statement