DFID's Value for Money policy: An analysis of its implications for recipients of DFID aid

Global financial crisis, austerity measures, intensified public and government scrutiny over an increased aid budget, all have had a major impact on DFID's development policy, which currently focuses intensely on VfM. The dissertation was set out to explore the concept of VfM and to analyse what the implications of its utilisation are for the implementation of DFID supported development programs. It further sought to identify the conceptual roots of VfM and how this reflects in the government's rationale for requiring that VfM is applied to development programmes. What the basis is for DFID's claims that VfM guarantees effective aid delivery. And lastly who, what, why and how we determine what is effective aid and what is VfM. The dissertation utilised a mixed method literature review approach, which includes both quantitative and qualitative research findings. It further presents a theoretical framework constructed with the assistance of the principal-agent theory, which clarifies the complex aid-chain DFID is operating in. The main findings show that increased pressure on VfM within DFID supported programs has the potential to reduce development effectiveness. The essential drivers of the VfM agenda, economy, efficiency, effectiveness together in balance determine 'good' VfM representing a linear process of X leads to Y. The process requires a strong focus for control over development aid outcome, robust accountability mechanisms backed by clearly defined results and rigorous evidence of 'what works best'. The dissertation questions whether actors in the aid-chain should not reinvent the current value systems in place, by acknowledging the complex reality of development and the importance of how context and process are constructed, which requires long-term approaches focussed on understanding relations between different conditions as being part or connected to other conditions.msc_inhunpub1456_ethesesunpu