Memorandum submitted by the Overseas Development
Institute
SUMMARY
1. This submission presents evidence from
ongoing research and advisory work by ODI on the three themes:
international aid architecture; aid effectiveness; and agency
incentives and practices in delivering aid.
2. ODI's programme of work in these three
areas includes reviews and evaluations of specific aid modalities,
donor coordination efforts at country and sector level, expert
opinion and advisory work on the workings of the international
aid system and involvement in surveys of progress against international
agreements on aid effectiveness.
3. The evidence submitted here is wide-ranging
but can be summarised in the form of four high-level messages:
— The benefits of stronger aid coordination
are more widely understood today than at the beginning of the
decade, but progress in implementation is uneven and in some cases
at odds with the good practice promoted in the Paris Declaration.
— Many of the problems of coordination
stem from an international aid architecture which suffers deep
seated, though increasingly clear, weaknesses. Donor agencies
retain substantial asymmetric power reflected in lack of clear
mechanisms for mutual (recipient-donor) accountability, and there
is growing and potentially uncontrollable proliferation in the
aid system.
— At the level of individual countries
there are definite signs of progress under the aegis of country-led
Poverty Reduction Strategies, Performance Assessment Frameworks
and Joint Assistance Strategies, but the mechanics of coordination
are challenging and costs are both high and unevenly spread among
donors and recipients.
— Beyond Accra there is a need to revisit
a progressive agenda for reforming aid that focuses more directly
on the need for de-fragmentation across the aid system, provides
greater space for recipient leadership, promotes strategies for
medium term predictability and takes greater account of the political-institutional
challenges of bringing about stronger ownership and accountability
within the aid relationship.
1. How donors seek to apply the principles
of the Paris Declaration (PD) and coordinate their aid programmes
in terms of objective and priorities
1. KEY MESSAGES
— Positive progress is being made with
Poverty Reduction Strategies (PRSs), the use of recipient led
Performance Assessment Frameworks (PAFs) and Joint Assistance
Strategies (JASs) as a basis for coordinating aid efforts at country
level.
— The benefits of coordination are
reduced by the lack of predictable aid flows, with clear consequences
for partner governments. Donors should do more to provide longer
term and more reliable financing commitments.
— Donors continue to find it difficult
to make the sacrifices necessary to reap longer term coordination
gains.
— Mutual Accountability mechanisms
have taken no more than a limited hold and need to be extended
much more widely.
BACKGROUND
Progress against PD
2. Early impressions from progress reports
for the High Level Forum in Accra (Paris baseline survey) suggest
that recipient governments are taking greater control of their
development agenda. PRSs are stronger than they were some years
ago, but donors are still leading development efforts in some
important respects indicating that further efforts are needed
to live up to partnership commitments.
3. Progress on Managing for Development
Results is comparatively slow for a number of reasons. The principle
was introduced at a relatively late stage and is inherently difficult
to implement. Relevant PD indicators are weak. Moreover donors
still tend to want to be in the lead on monitoring and evaluation
issues.
Strategic Partnership with Africa (SPA) survey
4. The Annual Strategic Partnership with
Africa (SPA) survey of budget support obtains information on progress
made by 20 budget support donors in aligning and harmonising their
activities in 14 Poverty Reduction Strategy (PRS) countries in
Africa. The survey was initiated in 2003. The 2007 survey report
will be finalised in early 2008.
5. Preliminary findings suggest a number
of positive trends. There is increased use of Memoranda of Understanding
(MoU) linked to partner led PAFs in country programmes: there
has been a net increase of 19 new programmes signed up to MoUs
among surveyed countries compared to that recorded in the 2005
survey. This partly reflects new agreements introduced in Malawi,
Mali and Sierra Leone.
6. There is some evidence of improvement
in the short term, quarterly predictability of disbursements,
ie within the recipient government's financial year, and in the
disbursement of commitments in general (92.5% of General Budget
Support (GBS) committed for 2006-07 was actually disbursed, compared
with an 83.1% disbursement rate for 2005-06 commitments). At the
same time, GBS has increased as a proportion of total aid covered
in the survey (24.5% of aid flows compared with 19.7% previously)
and there is a general improvement in recipient satisfaction,
reflecting greater use of joint reviews or missions and efforts
to reduce the burden of conditionality.
7. One of the areas in greatest need for
improvement is that of medium-term predictability. Of donor programmes
recorded as having committed funds for 2006-07 in the 2007 survey,
85% had also been able to make firm commitments for the following
year (2007-08), 69% had firmly committed for 2008-09 but only
35% had committed for 2009-10. For partner governments attempting
to undertake strategic resource allocation decisions over the
medium-term this lack of predictability is a major constraint.
Joint Assistance Strategies
8. Problems in delivering medium term predictability
are further evidenced by the experience of implementing Joint
Assistance Strategies (JASs). JASs aim to provide a coherent medium
term framework within which development partners can mobilise
and coordinate their aid at country level. JASs are in most cases
the "donor-response" to a country led PRS as in Ghana
and Zambia. In a few cases, as in Tanzania, the JAS is a government-led
strategy and is used to establish government preferences on how
aid is mobilised and allocated across the government system.
9. In few cases, however, have the aspirations
of creating a clear medium term framework for delivering development
assistance been fully realised. Despite a commitment in principle
to the JAS, few donor partners (DPs), and particularly bilateral
DPs, are able to commit to aid volumes beyond the first or second
year of the JAS. Few are in a position to readily switch their
assistance into sectors that are under-resourced relative to need,
and few are willing to make sacrifices in the short term to bring
about medium to longer term coordination gains (such as exiting
sectors in which they have a historical attachment).
10. JASs are also intended to provide a
platform around which DPs, in particular, can be held to account
for their part in the aid partnership. Few countries have so far
managed to develop robust mutual accountability mechanisms. The
SPA survey mentioned earlier finds that only four out of 14 respondents
in the 2007 survey yet have mechanisms in place to annually assess
donor performance against their MoU obligations. More detail is
given on progress with mutual accountability in response to section
2.
2. Ownership: the role of recipient countries
in managing aid flows, articulating their needs and facilitating
co-ordination
1. KEY MESSAGES
— Stronger recipient ownership of national
policy agendas and donor interventions is essential for achieving
development results.
— Good examples of mutual accountability
are few but important lessons are now emerging.
— The step change in country ownership
envisaged in the Paris Declaration requires further changes in
behaviour on both sides.
— Current donor approaches to assessing
effectiveness fall far short of providing partner countries with
the kind of information they need to decide which donors to engage
with for additional financing.
BACKGROUND
Recipient country ownership
2. The Paris Declaration has at its centre
the idea that stronger recipient country ownership of both the
national policy agenda and donor interventions in support of it
are essential for achieving better development results. Stronger
ownership depends on donors aligning with both the policies and
systems of the recipient country. It also depends on greater efforts
by donors to harmonise their activities by establishing common
arrangements, simplifying procedures and sharing information.
Lessons on country ownership have been learned the hard way through
failures of earlier approaches to development assistance centred
on freestanding projects and policy-based conditionality.
3. Key to achieving stronger country ownership
is the realisation of a more equal partnership between donors
and recipients. At present, donors are the more powerful actors
because they have the resources and make most of the decisions
about the quality and quantity of their assistance. Donors monitor
the performance of recipients and can use this as a basis for
rewarding good behaviour and sanctioning bad performance. Recipient
countries are much less able to monitor donor compliance with
aid effectiveness commitments, or take action if donors do not
perform. Recipients lose resources if they perform badly, but
donors do not lose "market share" and are only weakly
regulated through effects on their reputation amongst their peer
group.
Mutual accountability
4. Mutual accountability offers an alternative
vision for the aid relationship in which both donors and recipients
are held to account on a more equal footing. It requires shared
goals and reciprocal commitments, access to information about
donor aid flows and actions, mutual monitoring and review, and
greater recipient country voice (including potentially the capacity
to challenge through rewards and sanctions).
5. Recent research suggests that very few
countries have actually made tangible progress towards mutual
accountability frameworks of this kind. One positive example is
Tanzania, where a crisis in relations between donors and recipients
in the mid-1990s prompted the involvement of a panel of expert
advisers. By 2000, this had evolved into an Independent Monitoring
Group instrumental in improving the quality of aid to Tanzania.
Further innovations include the 2002 Tanzania Assistance Strategy,
which commits the government to take action in areas such as public
financial management and anti-corruption and commits donors to
take action on harmonisation and alignment. A complementary Joint
Assistance Strategy has been developed by donors. Tanzania has
also establishing harder conditions on the acceptance of aid through,
and stepped up efforts to monitor donor performance in providing
predictable aid.
6. In Vietnam a process of engagement with
donors which began in the late 1990s was followed by a division
of responsibility among donors, covering public financial management,
harmonisation of procedures and project management. The Government
demonstrated strong ownership of the national policy agenda and
proved willing to forego aid rather than accommodate donor demands.
Efforts culminated in the Vietnam Harmonisation Action Plan and
Hanoi Core Statement in 2005, which represent cutting edge attempts
to adapt the PD to country circumstances.
Stakeholder perceptions
7. Work commissioned by Development Finance
International, the Commonwealth Secretariat and DFID suggests
that partner country stakeholders take into account a range of
criteria when assessing the effectiveness of donor agencies. This
range of criteria is wider than those used by donors. In addition
to an interest in the impact of individual agency activities and
their performance against the PD indicators, these stakeholders
are also concerned about both donor policies and donor procedures.
8. There are no systematic approaches for
providing partner countries with the information they require
to make informed decisions about which donor agencies to engage
with when seeking additional ODA. This is hampering efforts by
partner countries to develop aid policies and hence ownership
of the aid system at national level.
3. The benefits and potential difficulties
of greater co-ordination: the impact on recipient and donor countries
1. KEY MESSAGES
— A prerequisite for effective coordination
at country level is consensus on aid policy and good institutional
arrangements for recipient-donor dialogue. Even with coordination
arrangements in place major institutional barriers typically need
to be overcome on both sides.
— GBS should remain the preferred aid
modality but needs to be strengthened, not least by avoiding combination
with less effective aid modalities.
— Donors need to recognise that GBS
can facilitate a process of internally driven change rather than
drive it, and that the link with poverty reduction is necessarily
long term.
— Some coordination efforts can actually
reduced domestic institutional capacity, reinforce donor asymmetric
power and impose additional costs on recipients.
BACKGROUND
Institutional barriers
2. Experience from major aid recipients
in Sub Saharan Africa (SSA) points to the importance of financial
and institutional aid dependency, shortage of sustained political
support for more difficult reforms, and the limited capacity of
Ministries of Finance to enforce changes in the incentive structures
of line ministries and local governments. Above all, the continued
dominance of projects and other modes of aid delivery that by-pass
the national budget process can offset the advantages of GBS.
3. The role that donors can play in strengthening
government ownership, public financial management (PFM) systems
and domestic accountability is more complex than previously assumed,
or admitted. In aid-dependent countries, budget priorities and
accountability mechanisms are shaped both by external factors,
such as the influence of donors on budget choices, and domestic
factors such as the role played by parliamentary committees and
civil society organisations. Formal processes and procedures can
work in contradiction with informal forces, and incentives defined
by existing rules and regulations may not have desired or easily
foreseen effects. Donors have tended to overlook the technical
and political feasibility of reforms and the importance of sequencing.
Progress on these issues will require better understanding of
the drivers of PFM reform in particular country contexts.
Country aid policies
4. Our review of co-operation between Netherlands,
Sweden and the United Kingdom in Rwanda has highlighted the importance
of donors working with Governments to develop frameworks for aid
policy, within which co-operation and dialogue can be organised
along lines similar to the Tanzanian Joint Assistance Strategy.
A consensually based statement of aid policy that balances national
ownership with maximum consensus can help provide a strong basis
for progress on the alignment agenda and in implementing PD principles.
5. Donors need safeguards that Governments
will commit to acceptable norms of behaviour, including relatively
technical but also sensitive political assurances. At the same
time, donors need to conform to norms of good behaviour concerning
delivery and predictability of assistance, including clearly defined
channels for speedy dispute resolution and graduated response
mechanisms in the event of disagreements. In Rwanda as elsewhere
strengthened and institutionalised channels of dialogue need to
be established for this purpose.
GBS
6. Recent assessments of GBS as an aid modality
point to significant but, in absolute terms, still quite limited
impacts on macroeconomic stability and government spending in
priority sectors. They also highlight rising transaction costs
due to the co-existence of GBS with other aid modalities, vulnerability
of GBS to governance crises and continued weaknesses in domestic
accountability.
7. The effectiveness of GBS can and needs
to be improved in a number of ways. It is vital to give close
attention to the sustainability, predictability and timeliness
of financial flows, reduce the large number of donor projects
and reign back the parallel rise in common-basket funding. Donors
also need to recognise that GBS can facilitate a process of internal,
politically-driven change, rather than drive it, and that the
link to poverty reduction is necessarily a long term one.
Sector budget reform
8. More could be done to improve the way
in which budget reforms are implemented at sector level. Most
reforms aimed at improving the management of public expenditure
try to achieve the core objectives of fiscal discipline, resource
allocation based on government strategic priorities and promotion
of more efficient service delivery.
9. But typically these reform processes
run out of steam by the time they reach sector level. Energy for
reform needs to be sustained well beyond finance ministries to
ensure that efficient service delivery receives the attention
it needs. Sector budget reforms need to be well integrated with
existing sector public expenditure management systems, for example
though more systematic efforts to tackle mismatches between underlying
costs and available resources and to seek out efficiency gains.
In the absence of this budget reforms are likely to remain cosmetic.
Common funds
10. Despite apparent enthusiasm, donors
are not shifting decisively towards direct budget support, while
common funds have increased in popularity. In the Mozambique health
sector, for example, common funds make up approximately half of
sector aid and a third of sector funding. In Tanzania, a common
fund dominates aid to primary education.
11. Common funds are meant to generate efficiency
gains over individual projects and to work better with government
systems. Donors also argue they are useful in building the preconditions
for an eventual adoption of budget support modalities.
12. Our research shows that these expectations
are misplaced.
13. Establishing common funds requires in
practice efforts similar to those needed to strengthen mainstream
government systems, and face the same constraints as the systems
they attempt to side-step. Moreover these funds often overshadow
(or even replace) domestic delivery systems, are difficult to
take apart to allow subsequent transition to government systems,
and divert attention away from vital sector policy issues.
14. In short, the move to common funds appears
to be doing more harm than good. The main attraction to donors
rest in the visibility they create with "branded" interventions,
and superficial appearance of lower risks achieved though tighter
control over the use of aid funds. A more critical approach to
the use of common funds, by donors and recipients alike, is urgently
needed.
4. How bilateral and multilateral aid, including
within the EU (member states and EC aid), can be better aligned
and coordinated
1. KEY MESSAGES
— Current assessments of aid effectiveness
focus on individual agencies and throw very little light on the
effectiveness of the aid system as a whole, or how it might be
improved. Donors must consider ways of opening up a broader discussion
on the future of the international aid architecture
— Bilateral donors should stop carrying
out their own assessments of multilateral effectiveness and instead
make the case for multilateral donors to produce comprehensive
assessments of their own. Standards for assessment must be developed
as a first step.
— The effectiveness of EC aid is improving,
but lack of coordination among the bilateral programmes of EU
Member States is a persistent problem. Routing more resources
though the EC (and other multilateral channels) is an increasingly
important avenue for raising the overall effectiveness of EU aid.
BACKGROUND
Problems with international aid system
2. The international aid system is a loose
aggregation of more than 50+ bilateral donors and over 230 international
organizations, funds and programmes. The result is high proliferation
and fragmentation, with bilateral and multilateral donors, and
recipient governments, pursuing multiple agendas for different
purposes, leading to poor coordination and high transaction costs.
3. The international context is changing
with the growth of China and India, trade and security challenges,
and concerns over global/regional public goods which could knock
progress against MDGs off-track and raise huge new demands for
additional financing.
4. Approaches to assessing the effectiveness
of multilateral channels, described below, are helpful in providing
information on components of the aid system, but provide little
useful information about its performance as a whole. Critical
weaknesses such as proliferation and verticalisation, have been
identified but there is little or no consensus on how the system
should evolve to address these problems.
5. Donors should consider ways of opening
up broader discussion on the international aid architecture. For
example consideration might be given, outside the normal calendar
of replenishment and funding negotiations, to whether proliferation
is best addressed though some form of planned rationalisation
of aid delivery channels, disciplining mechanisms at country level
or more radical "marketisation" of the aid system.
Assessing Multilateral Effectiveness
6. ODI has recently carried out a study
for DANIDA surveying the different approaches which donors take
when assessing the effectiveness of multilateral donor agencies.
7. The study shows that individual approaches
for assessing multilateral effectiveness provide a very partial
picture. They provide little information about impact, or on outputs
and outcomes in a form useful for day-to-day management decisions.
Donors should therefore continue to explore approaches which synthesise
information from a range of sources such as the new MOPAN (Multilateral
Organization Performance Assessment Network) Balanced Scorecard,
though as we suggest below MOPAN could perform a more strategic
role than this in future.
8. A more fundamental problem is that approaches
used by bilateral agencies, either individually or as a group,
are inherently inefficient. They lead to duplication and significant
transaction costs for bilaterals themselves, multilaterals and
wider stakeholder groups. Instead bilaterals should use their
role on the governing boards of multilaterals to make the case
for agencies to themselves produce information in a form useful
for both for internal purposes, bilaterals and other stakeholders.
9. As prior step, improved standards for
assessing effectiveness need to be developed. International networks
such as the MOPAN group should consider developing into a forum
for building consensus around standards of assessment, and advocacy
and influencing objectives of bilateral donors.
EU Aid
10. The EC has the potential to act as genuinely
comprehensive agency, working on a large scale, across many sectors
and with strong global presence. However many EU member states
consider that the quality of the EC`s aid is below that of their
own bilateral programmes and provided at higher cost.
11. This perception has begun to change
with the introduction of reforms in 2000. The OECD DAC peer review
of EC Development co-operation showed some progress towards PD
objectives and increased aid effectiveness. The number of planning
documents and instruments has reduced, helping simplify structures
and giving greater coherence. Establishment of the Europe Aid
office as the single implementing agency, together with moves
towards "de-concentration" has had a significant impact.
12. Of course much remains to be done. Improved
agreements on joint technical assistance are needed. Many systems
and procedures are still too complicated and subject to centralised
checks, and authority remains unnecessarily centralised. Staff
numbers and capabilities are not yet adequate to fully support
harmonisation and alignment (H&A) efforts and permit a wider
coordinating role over EU aid at country level.
13. Despite improvements, the EC accounts
for only about 20% of all EU aid, of which about two thirds of
which remains bilateral, with the remainder channelled mainly
through Multilateral Development Banks (MDBs) or the UN. Collectively,
EU bilateral aid and EC aid remains fundamentally fragmented.
Improving the quality of EC aid, building on existing momentum,
and increasing the proportion of Member State's aid provided via
the EC (and other multilateral channels) is a promising route
for improving the overall effectiveness of EU aid in the long
term.
5. Comparative advantage
1. KEY MESSAGES
— The EU Code of Conduct on Complementarity
and Division of Labour embodies novel ideas on how to exploit
the comparative advantage of different agencies, but results in
implementing the code on the ground so far are discouraging.
— The code is unlikely to succeed in
its present form since it does not address important practical
obstacles, or overcome fundamental lack political will among Member
States to sacrifice visibility and international profile.
BACKGROUND
EU Code of Conduct on Complementarity and Division
of Labour
2. The EU Code of Conduct on Complementarity
and Division of Labour in Development Policy approved by the Council
in May 2007 sets a new frontier for European aid by working towards
greater specialisation and increased concentration in development
cooperation. The goal is to rationalise the European aid system
by reducing the number of donors involved in the same kind of
activity in the same country and rationalising country coverage,
by exploiting the comparative advantages of different donors.
3. The Code is voluntary and is intended
to be implemented flexibly to take into account the situation
of partner countries. Two central guiding principles are, firstly,
that donors restrict themselves to a maximum of three sectors
per country and either redeploy out of other sectors or work as
a silent partner, allowing another EU donor to take the lead.
Secondly, that no more than 3-5 donors should be present per sector
(the Code of Conduct does not say whether this means all donors
or only EU donors).
Practical challenges
4. The challenges of making the Code of
Conduct a reality are formidable. In practical terms, it is necessary
to know at the outset how many sectors each EU donor actually
supports in each country. In practice this is not easy. A prior
question is what is meant by the term "sector", which
could be wide or narrow. The Code of Conduct is not precise on
this issue and allows for a high degree of flexibility: it does
not say, as it might have done, "use international definitions
of sectors, as defined by the DAC".
5. The way the code is framed therefore
leaves difficult questions to be answered. Unfortunately early
signs are not encouraging. Experience from division of labour
efforts in Zambia has shown that that the number of donors per
sector barely reduced, and that the willingness of donors to withdraw
from sectors in which they are engaged is limited.
6. Without a sustained effort on harmonisation
it is not clear that member states will be able to implement the
code in its existing from. It requires a willingness on the part
of donors to withdraw from sectors in which they are engaged which
cannot be taken for granted.
7. Division of labour efforts will also
depend on the availability of human resources in EC Delegations.
This could pose serious constraints since turnover rates are very
high, staff at delegation level is often thinly spread and lacking
in necessary resources.
8. Ultimately, implementation of the code
rest on the political will of the Member States and the European
Commission to make difficult choices, and sacrifice their desire
for higher visibility and enhanced international profile in the
short term.
6. Next steps for Paris Declaration and for
aid effectiveness
1. KEY MESSAGES
— Beyond Accra there is a need to develop
the Paris agenda in forward-thinking and progressive directions,
and tighten commitments in areas where progress is lagging.
— Post Accra discussions need to focus
more directly on de-fragmenting the aid system, increasing space
for recipient leadership and recognising the political challenges
for building stronger ownership and mutual accountability.
— Efforts should continue on an evaluation
framework to support lesson learning, a stronger evidence base
and to test more thoroughly the underling logic embodied in the
PD.
BACKGROUND
Progress is patchy
2. Progress on Paris has been patchy to
date, with some recipients and donors making good progress and
others very little. Political governance concerns are affecting
progress on the recipient side and threatening gains made in "donor
darling" countries like Uganda and Ethiopia. "New"
donors including non-OECD countries, private trusts and foundations,
and vertical funds are operating largely outside the Paris process
at country level.
3. Some PD commitments are unlikely to be
delivered without a step change in effort in the run-up to 2010,
as described below. There is some evidence of a return by donors
to use of conditionality as means of "buying reform"
in the guise of managing for results. This likely to increase
in today's risk-averse climate, but is burdensome for recipients
and risks diverting attention from, for example, better use of
political analysis at selectivity stage.
Building more effective partnerships
4. Our research points to five key factors
needed for effective partnerships.
5. Confidence: Actions are required
on both sides to build trust. Recipients need to develop clear
development strategies, linked to a medium-term budget framework
and planning process, beforehand so that donors can align with
policies and systems (though these actions need not happen simultaneously).
Public financial management systems and effective dialogue structures
are also vital for developing confidence in the aid relationship.
6. Credibility: Intentions expressed
by both sides need to be both rigorous and reliable. For instance,
donors need to demonstrate that aid commitments are matched by
predictable disbursements. Recipients need to open up public finances
to wider scrutiny, and demonstrate firm intentions on aid management
(such as legal requirements that ODA should be included in the
national budget).
7. Coherence: Coherence between the
actions and statements of multiple actors on both sides. For example
coherent use of Performance Frameworks to assess both general
and sector budget support, and coherent division of responsibilities
between different ministries backed though strong political leadership.
8. Capacity: adequate aid coordination
capacity is needed to allow donors and recipients to engage in
effective dialogue and monitoring, manage aid flows, build confidence
and track coherence between local and international policy processes.
9. Timing and Sequencing: actions
need to be sequenced carefully over a considerable period time
(eg 10 years) to develop effective mutual accountability mechanisms.
For instance, donors can only align once the government has a
clear national policy agenda and workable budget and planning
systems, yet recipient government may not invest in systems if
donors appear unwilling to use them.
Looking beyond Accra
10. Beyond Accra, there is a need to begin
developing the Paris agenda in forward-thinking and progressive
directions. A firmer line is needed on aid instruments such as
vertical funds and pooling mechanisms, which in some cases are
undermining efforts to build institutions, and on projects which
make limited use of recipient systems. The potential gains from
GBS are not being fully realised because donors are keeping eggs
in other baskets. While appearing to reduce risks in reality these
can be equally prone to corruption.
11. Untied aid is unfinished business and
needs a much harder indicator in the post-Paris agenda than merely
"continuing progress over time".
Evaluation
12. The PD is founded on the premise, firstly,
that country ownership together with other outputs will strengthen
country capacity to make and implement results orientated policies
and make good use of aid. Secondly, that this will raise the quality
of public investment and service provision, including regulation
and institutional development for private investment. Thirdly,
that this would lead to better development results, such as growth
and transformation, and faster progress towards the MDGs. Efforts
are being put in train to test the underlying logic of the declaration
and learn lessons from early stages of implementation though a
common evaluation framework: these will clearly be invaluable
in helping set the post Accra agenda.
7. DFIDs role in facilitating greater coordination
1. KEY MESSAGES
— Political leadership and public awareness
is critical if DFID is to continue to generate and absorb good
practice at country level, and be in a better position to analyse
and (where appropriate) take necessary risks.
— DFID should work more with non-like
minded donors to make progress against the Paris agenda and to
open up discussions on aid architecture.
— The SPA survey suggests number of
important areas where DFID needs to catch up in delivering on
its aid effectiveness commitments.
— DFID should consider ways of strengthening
the resources available to its country offices, such as though
reductions in staff turnover, in view of pressures on administrative
costs and the need to raise aid effectiveness.
BACKGROUND
Political leadership
2. The 2006 DAC peer review made a number
of recommendation about ways DFID could facilitate greater coordination
though internal changes. A precondition is that DFIDs political
leadership needs to be fully informed and supportive of emerging
good practice at country level, especially as DFID tries to deliver
more and better aid, and under increasingly more difficult circumstances.
3. A frank dialogue is needed with the public
both to maintain support for and to improve understanding of some
of the unavoidable risks involved in providing development assistance.
There are strong arguments for more thorough and early assessments
of political risks at country level, and for focusing more on
risks across the aid bilateral portfolio rather than at the level
of individual aid recipients. These issues are less well understood.
In the absence of a thorough airing DFID may be led into over
cautious approaches, and place over-reliance on safeguards, such
as routing funds via alternative routes, which in reality are
of limited value due to the fungibility of aid.
Working with non-like minded donors
4. DFID needs to work more actively with
non like-minded donors in order to make significant further advances
on the Paris agenda. Much remains to be done to influence international
donors to move more decisively towards common approaches. Without
wider engagement it is questionable whether DFID can make headway
on deep seated challenges related to the international aid architecture.
In pursuing these challenges DFIDs needs, as noted by the DAC,
to strike a balance its leadership role though broad based debate,
and promoting its own model.
Human resources
5. DFID faces major challenges in scaling-up
or at least maintaining high levels of bilateral aid with more
limited human resources. This is especially true as attention
shifts towards Fragile States, and if DFID is to build up competencies
at country level to deal with complex institutional processes.
Reducing staff turnover at field level to build continuity and
consistency of DFID action has an important role to play.
Delivering aid effectiveness commitments
6. Preliminary findings from the 2008 SPA
survey show that the DFID has some way to go in delivering on
aid effectiveness commitments at country level. Among the 14 donor
countries surveyed the UK ranks comparatively low in aligning
GBS missions with PRS reviews and in providing recipients with
information on planned disbursements in a from needed for budget
planning. The UK does little better than average among surveyed
donors in minimising the number of reviews and missions it mounts,
and in aligning disbursements with the national budget cycle.
Some attention is needed to improve performance in these areas
in future.
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