International development cooperation is characterised by an increasing diversification of goals, approaches and a proliferation of actor constellations. While these fundamental changes of the development cooperation landscape have been reflected in the international aid- and development-effectiveness processes, the global development community – and especially aid-receiving countries – continue to struggle with their implications.

Critics have long argued that the proliferation of actors and approaches has led to a fragmented development cooperation landscape that carries important negative consequences in terms of higher transaction costs for those on both sides of aid relations; conflicting concepts and policies; efficiency losses; and neglected sectors and countries. Others point towards the potential of a diverse development landscape for mutual learning, innovation and competitive selection among the different providers of development assistance.

One way that has been suggested to overcome the potential negative effects of fragmentation is by providing aid through more harmonised aid modalities such as budget support. However, most donors continue to be reluctant to provide significant shares of their aid in the form of budget support. Although recently produced evidence shows that budget support can be an effective aid instrument, research on the relative effectiveness of different aid modalities and the political economy behind aid modality choice is still scarce.

The joint workshop between JICA-RI and the German Development Institute / Deutsches Institut fur Entwicklungspolitik (DIE) aimed to contribute to the discussion around aid fragmentation and effectiveness in two ways: In a first session, evidence on the cost and developmental impact of fragmented aid was presented and contrasted with a ‘stock-taking’ of the current international process by which the development community intents to deal with fragmentation and diversity. In a second session, theoretical and empirical arguments were presented on the political economy of donors’ choice to provide aid through harmonised modalities using country systems. These arguments were then complemented by a case study on the relative effectiveness of project aid versus country-system aid.

This Workshop was expected to offer an opportunity for international scholars and practitioners to have mutual and candid dialogues, producing more innovative policy implications through synergetic effects.