1 Ignacio Martínez is a researcher at the ICEI. imartine@icei.ucm.es. José Antonio Sanahuja is a lecturer in international relations at the Complutense University, and Head of the Department of Development and Cooperation at ICEI. sanahuja@cps.ucm.es. This analysis is based on research carried out by ICEI with support from the Spanish Agency for International Development and Cooperation (AECID) and the Carolina Foundation in 2008 and 2009. Instituto Complutense de Estudios Internacionales Campus de Somosaguas. Finca Mas Ferré, Edif..A. 28223 Madrid www.ucm.es/info/icei/ Decentralized development aid plays a larger role in Spain than in any of the other 23 donor countries on the Development Assistant Committee, particularly aid coming from the Autonomous Regions (CCAA) and the city councils. According to data from the Secretary of State for International Cooperation (SECI), aid provided by the regions increased from 250 million euros to a little over 600 million in the period between 2002 and 2008, amounting on average to 14.7% of Spain’s total official development aid (ODA) 1 . The importance of Spain’s decentralized aid is unusual and it is also one of its main assets. It makes the country’s development aid more plural and diverse. It ensures a bigger role of civil society participation in foreign aid policies. The significant capabilities of decentralized actors in managing public policy at a local and region level in spheres such as health, education, employment and productive development, land use and management and the environment are incorporated into Spanish development. It contributes to a higher international presence of regional and local actors, both governmental and non- governmental, and can help local actors to have a more active participation in global governance and the emergence 1 In Germany it was about 9%, but a very high proportion of this are grants to students in developing countries which count as ODA in accordance with the DAC accounting criteria. In Belgium, the figure is about 5%, and in other countries where data is available the figure does not exceed 2%. See OECD 2005 for more information on this. of a more efficient, more representative and legitimate “new multilateralism” to tackle the problems of globalisation. The skills and assets that decentralized aid provides to the Spanish aid system are also especially relevant to the aid donor’s international commitments of aid effectiveness, which demand a better division of labour based on comparative advantages and better specialisation. These skills are also key to supporting civil society and decentralized governments in developing countries, which need to have a greater role in defining development policy and policies to fight poverty in their own countries, so that a true “democratic ownership” of those policies could take place. However, some of the main weaknesses of the Spanish development aid system are also rooted in its decentralized nature. In a context of rapid growth, a very dysfunctional and fragmented model has emerged, with serious problems of organisation and coordination between agents, of duplication of efforts, high transaction costs and notable diseconomies of scale. This problem was highlighted in the 2007 DAC peer-review of Spain. Spanish aid system has also developed into a model plagued with rivalries and imitation. It combines on the one hand a strong institutional and regulatory framework –regional and municipal agencies and development aid laws, master plans, consultative councils and a proliferation of funding sources in each autonomous or local government – with, on the other hand, subsidises to development NGOs, which are in many cases the only instrument for channelling and managing resources, often driven by demand and guided by a logic based on short-term initiatives and fund transfers. Although the rapid growth of the decentralized development aid partly explains these problems, they are to a large extent due to the appearance of diverse interests by decentralized donors. In the same way as with traditional nation states, decentralized actors also use aid to serve their own agendas and foreign interests, to legitimise themselves at home or to project their identity or their nationalist demands often under the guise of “development” discourses. Decentralized development aid in Spain and the effectiveness challenge Ignacio Martínez and José Antonio Sanahuja ”Some of the main strengths of the Spanish development aid system are placed in its decentralised actors, but that is also the cause of some of its greatest weaknesses” ” In order to improve the decentralised development aid, it should be assumed that the Paris and Accra principles also apply within the Spain's aid system and concern all its agents ”