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Global funds are an increasingly significant part of the global aid architecture. The way they operate has many advantages, including the fact that they encourage a focus on results. However, there is also an inherent tension between the global fund approach and aspects of the aid effectiveness agenda. This report, commissioned by the UK Department for International Development's (DFID) International Director's Office (IDO), looks at two closely related sets of aid effectiveness issues: how global funds allocate their funds among proposals and countries and the impact this has on Paris/Accra principles of aid effectiveness; and how they deal with predictability, sustainability and capacity aspects of alignment.