In view of the multiplicity of aid programmes and the growing number of developing countries which receive aid from several sources, the need for co-ordination of aid activities has been increasingly felt both by recipients and donors.
Administrative resources in recipient countries are limited and the need to deal with each donor separately. This places a very considerable strain on these resources. Each application for aid usually involves a close examination of the prospective recipient's development plan, programmes and resources and, if several donors are involved, there may be duplication of effort and time consuming consultations which are especially burdensome for the understaffed agencies of recipient governments. The requirements of aid-giving countries and multilateral institutions vary considerably from one to the other. Cases have thus arisen in which developing countries, having gone to great trouble and expense to prepare projects in a form acceptable to one aid-giving country, find that the project has to be completely recast before presentation, in case of need, to another country. Consequently, while aid-giving countries are not prepared to commit funds except on the basis of fully worked-out projects, recipients are reluctant to incur the heavy expense of full-scale project preparation in the absence of some indication that finance will be available.
Aid-giving countries encounter difficulties resulting from a lack of adequate preparation of assistance requests in terms of the economic priority, technical feasibility and financial viability of projects, and of the institutional capacity to handle them. Consequently, considerable delays may occur because of administrative shortcomings in the recipient countries themselves.
The coordination of the projects of several donors also makes heavy demands on the recipient's administrative cadres. But even apart from these practical difficulties, aid programmes tend to work at cross purposes because of differing views of the recipient countries' needs. Aid donors, unfortunately, are reluctant to divulge information about their projects to one another, making it difficult to coordinate efforts. The fear that releasing information might lead to good project ideas being financed by others is cited as one reason for donor unwillingness to cooperate.