Opinion: Prioritize evidence in aid spending — time for ‘Fakta har makta’

The world is facing escalating global warming, increasingly deadly conflicts, and a significant shortfall in achieving the Sustainable Development Goals. The most obvious solution is to optimize the impact of development spending. This can be done by prioritizing effective, scalable, and transformative programs. In essence, we need to base our decisions on evidence. The Norwegian saying, “Fakta har makta,” meaning “Facts have the power,” encapsulates this crucial need in international development today. This year marks the 20th anniversary of the Paris Declaration on Aid Effectiveness, which put results, alongside the other criteria, front and center, making it a timely moment for reflection. Evidence on what works must guide spending and implementation. Yet we believe that despite calls for more evidence-based policymaking, there has been no fundamental shift in how development agencies operate and prioritize. The focus remains on spending rather than on achieving results. If you zoom out, the world is a massive success — and development aid has contributed to it. We have seen generations of progress, with global poverty steadily declining since the end of World War II. Education and electricity have gone from luxury to widespread. Child mortality has halved from the turn of the century, maternal mortality is down by one-third. In the year 2000, 63 countries were categorized as low-income countries by the World Bank. By 2011, that number was down to 35. “Letting facts, or evidence, have the power should be at the heart of a renewed and strengthened global development push toward 2030.” --— Both macro- and micro-level evidence shows that development assistance can contribute to progress. Research suggests that aid contributes to economic growth; a country receiving 10% of its income from aid will, on average, have one percentage point higher growth than it would without aid. Still — social and economic progress has stagnated in the lowest-income countries, armed conflict is on the rise, and humanitarian needs are growing. The World Bank warns of poor growth prospects for low-income countries, at the same time as funding to these countries has stagnated. Both Norad — the Norwegian Agency for Development Cooperation — and the World Bank estimate around 700 million people are trapped in extreme poverty, while the climate crisis is a new destroyer of development. Yet, many countries are reducing their development spending. The United States, which contributed about 29% of global official development assistance, or ODA, in 2023, has paused all development assistance for 90 days. Norway, once among the few nations allocating 1% of its gross national income to development assistance, is now almost alone in this commitment. This situation should lead to renewed interest in aid effectiveness. An emphasis on cost-effectiveness The “credibility revolution” in development economics and the social sciences has provided evidence on what works. One example: Cash transfers and social protection schemes increase consumption and improve health and education, and help people escape poverty permanently. In global health, we have a strong body of evidence supporting a range of cost-effective interventions. Similarly, the Global Education Evidence Advisory Panel identified cost-effective approaches to improving learning and education in low- and middle-income countries. Effective development assistance can achieve remarkable results. It has driven economic growth, improved health and education, alleviated poverty, and reduced suffering. But not all aid is effective. The difference in cost-effectiveness between programs is significant, and the greatest risk to both poor populations and the legitimacy of aid is investing in the wrong programs. This must change in 2025. We must take development effectiveness seriously. Consider the following value proposition: Using the 2023 final ODA data as reference, if Norway doubled the effectiveness of just 1% of its development budget, it would be equivalent to increasing the budget by $50 million. If all Development Assistance Committee donors did this, it would add $2.3 billion in aid — comparable to Belgium’s total ODA allocation and more than what Syria received in 2023. Success depends on knowing what works. It is time to put knowledge center stage. At Norad we’re now spearheading this within our own organization. We do this standing on the shoulders of giants, like development economist Ruth Levine, who said: “Values alone are not enough to achieve distributive justice … Fairness can be achieved only if full and unbiased information is available about current conditions, and about the costs and benefits of one way of acting — one policy option — versus another.” Still work in progress, but our new approach prioritizes results and the risk of not achieving them. We task our teams with developing evidence-based theories of change, empower them to make investment decisions based on these theories, use research and evidence in implementation, and hold partners and ourselves accountable for the results. We rely on partners in this work. In 2023, Norad signed the Global Evidence Commitment, along with other agencies that include the Millennium Challenge Corporation, the U.S. Agency for International Development, the U.K. Foreign, Commonwealth & Development Office, and the Inter-American Development Bank. Every year, organized by 3ie, the International Initiative for Impact Evaluation, we meet with other signatories to discuss achievements and failures in implementing this declaration. Later this year, we look forward to hosting signatories in Oslo. This is how we are acting on our country’s saying, “Fakta har makta.” Letting facts, or evidence, have the power should be at the heart of a renewed and strengthened global development push toward 2030.