empirically that the indicators within each sub-index are reasonably well correlated, suggesting that they could be measuring the same underlying phenomenon.

The aid quality of different donors can now be compared along each of these indicators and subindexes, as well as on the overall aid quality index. Indeed, as we have argued above, it will often make more sense to use the less aggregated indicators. Combining indicators inevitably raises the question of how to select the appropriate weights, and as we have shown above, the rankings are somewhat sensitive to different weights. The individual indicators and sub-indexes are likely to be more actionable than the overall index because of their greater specificity.<sup>29</sup> Individual indicators are also necessary to track progress (in absolute terms) over time, as aggregates built from standardized indicators are designed for comparing relative performance across donors.

At the same time, we believe that an overall index does have its place. Rankings along that single index can bring more pressure to bear on low-ranked donors to move towards ―best practices‖ in delivering aid. In the absence of an overall index, such donors could simply stress the small number of indicators on which they score reasonably well. An overall index prevents this problem.

Although we have tried to be comprehensive in assembling indicators of aid quality as defined implicitly by the Paris Declaration, many aspects of donor agency performance are currently not well measured so were excluded from our index. An example is delegation of aid to another donor; delegation can have the effect of harmonizing and specializing the delegating donor’s activities, but the practice has not yet been measured systematically. A related concern is that our measurement of specialization takes into account its quantity but not its quality: specialization should really take place in areas in which donors have comparative advantage, but we have no data to assess whether this is the case. Other hard-to-quantify areas of donor performance go beyond the content of the Paris Declaration, including the knowledge dimension of aid: the aid agencies’ contributions to our understanding of development problems and solutions. Transparency in data reporting and operating costs (which Easterly and Pfutze attempt to measure) represents only a small part of donors’ information-provision role. For example, some donors conduct and publish systematic evaluations of their projects. Ideally, we would have included measures of the quantity, quality, and transparency of each donor’s impact evaluations, its research, and its country analysis. A related dimension of aid quality, even harder to quantify, is the donor’s willingness to experiment with promising new approaches: innovation is conducive to learning, and some donors may be more innovative and others more risk-averse. Including measures of these dimensions might well change our rankings, which offers another reason to be refrain from over-interpreting small differences in rankings.

Our goal with this paper has been to help improve the measurement of aid quality and donor rankings, with the ultimate objective of improving donor performance. Our intent is not to supplant the other ranking and quality-measurement efforts, which are apparently intending to continue. The CGD/Roodman index serves as an input to the regularly updated CGD Commitment to Development Index, while the Easterly-Pftuze rankings are expected to be updated as well. In addition, a promising separate Brookings/CGD ―Quality of Official Development Assistance‖ measurement effort has recently gotten underway.<sup>30</sup> While we do plan to update our

> 29 White and Woestman (1994) compare DAC bilateral donors on several aspects of aid quality (aid untying, poverty selectivity, and the concessionary element of aid), but do not combine them in a single index because it would obscure the ―sources of discrepancy in donor performance.‖

> 30 That project will come out as Birdshall, Kharas, and Mahgoub (Forthcoming).  The paper has not been published yet, but based on the conference presentation that is available (from the March 2010 AidData conference at Oxford University), it appears to share a similar motivation to ours.   Like our paper, that project emphasizes the importance of assessing donor performance along distinct and well-defined dimensions, and it also uses the Paris Monitoring Indicators

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