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Contributions from
the Column
Focus
Ownership and donor harmonisation: a brief introduction
Harmonisation: Donor pledges are steps in the right direction
How KfW Entwicklungsbank assesses budget support
Bangladesh’s PRSP and civil society
African opposition to neoliberalism
Political instability and programme-based approaches
07/2006
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Steps in the right direction
The donor community has made sensible commitments to improve its activities. The Asian Development Bank is working on implementing policy accordingly and hopes all donors will live up to their pledges.
[ By Peter L. Fedon ]
The Paris Declaration on Aid Effectiveness (the Declaration) was endorsed at the Second High Level Forum (the Forum) on 2 March 2005 by Ministers and senior officials representing about 60 countries and more than 50 multilateral and bilateral development institutions. While the main text and the indicators were agreed at the Forum, the targets designed “to track and encourage progress at the global level” were subsequently completed by the Working Party on Aid Effectiveness of the Development Assistance Committee (OECD-DAC).
In addition to a Statement of Resolve, the Paris Declaration is characterised by three distinctive and significant features:
– a set of more than 50 Partnership Commitments, organised around concepts of Ownership, Harmonisation, Alignment, Managing for Results and Mutual Accountability and applicable to partner countries (as developing countries are called in this context) and donors;
– the establishment of a set of 12 Indicators of Progress, including targets by 2010; and
– the intention to monitor and evaluate progress against the Indicators of Progress and targets.
These features are designed to scale up the contributions of the development community to improve aid effectiveness, particularly in line with achievement of the Millennium Development Goals (MDGs) by 2015, and to track progress against these commitments. The Partnership Commitments and the Indicators of Progress that were agreed by consensus must now be regarded a set of international duties on the part of the Forum participants, and any other parties that subsequently choose to accede to the Declaration.
Each Commitment (whether on the part of a partner country or a donor country or as a joint commitment) permits a useful degree of flexibility for purposes of implementation. The Partnership Commitments seek to encompass varying country circumstances and, as such, they are not absolute norms, but statements which serve as an agreed expression of global concerns to prompt individual and collective actions to improve development effectiveness.
The Declaration anticipates that two rounds of monitoring will be conducted to review progress in implementation prior to the next high level forum in 2008. The first survey to monitor progress against 12 indicators has been launched in May 2006 in all of the countries who have confirmed their interest in taking part.
What has been achieved
The Asian Development Bank (ADB) is pursuing a range of activities, particularly at partner country level, which respond to the Declaration’s imperatives or contribute to meeting the Partnership Commitments. Activities include harmonisation efforts covering procurement, consulting services and disbursement procedures; country planning, portfolio reviews, public financial management, auditing and donor harmonisation and coordination at country, sector, project and programme levels. Moreover, ADB is already pursuing many alignment initiatives in relation to areas such as preparation of National Poverty Reduction Strategies, decentralisation, evaluation practice and poverty assessments. For example, a working group of the multilateral development banks’ (MDB) Evaluation Cooperation Group has developed Good Practice Standards and is undertaking benchmark studies to assess the degree to which each MDB adopts those standards.
Perhaps the most compelling example of country ownership under the Declaration has emerged in Vietnam. Agreements regarding Commitments among donors and with the Government are contained in the Hanoi Core Statement on Aid Effectiveness, Ownership, Harmonisation, Alignment and Results, which was approved by the Government in September 2005. The so-called “Five Banks” support to the Government resulted in the formulation of the Comprehensive Harmonisation Action Plan on ODA. The Five Banks’ Initiative involves the ADB, KfW Entwicklungsbank, France’s AFD, the Japanese Development Bank and the World Bank. Among other issues, it is focusing on the legal and institutional business environment as well as environmental and social safeguards.
In many countries, donors’ country strategies are now more clearly aligned with national strategies such as Comprehensive Development Frameworks, National Poverty Reduction Strategies and other sector development strategies.
Challenges
The Declaration challenges donors to think and act differently – to be flexible and work ‘outside the box’ in order to meet partner countries needs and meet development partners half-way. However, there are limits to flexibility in rule-based donor organisations where operating guidelines and policies reflect the interests of a variety of stakeholders. In partner countries, resource constraints remain a major barrier to implementation of the Declaration, especially for weak performing partner countries and those that have experienced severe reductions in grant and concessional assistance.
Ownership. There is a danger that partner country ownership of National Poverty Reduction Strategies (NPRS) is limited and seen as an externally imposed, consultant-driven exercise that is not sustainable. Another danger is that NPRS’ are too comprehensive and insufficiently prioritised. This makes them unlikely to be realistic and also reduces the need for donors to re-prioritise their own programmes toward a stronger alignment with partner countries priorities.
Alignment. Reliable country systems for procurement and public financial management systems are often not fully in place or suffer from weak capacity. Aid flows are not reported on partner countries’ national budget and only in a few countries international finance institutions coordinate programmes. The use of strengthened country systems is undermined by vested interests that tend to prevail in interagency coordination. In many countries decentralisation or devolution has increased transaction costs involved in project design and implementation. There are specific challenges in the work undertaken by the OECD-DAC Joint Venture on Procurement. For example,
– donor countries and development institutions effectively outnumbered (and therefore dominated) the partner countries at the first meeting, and this raises concerns of effective ownership in the process;
– the commitment of some MDBs to country procurement systems principles under the Declaration remains unclear;
– it is difficult to develop “simple-yet-comprehensive” assessment tools and methodologies that will satisfy all participants and Declaration signatories; and
– data vary from country to country making assessment standardisation difficult, and data may also be difficult to collect. Importantly, assessing country procurement systems requires more resources than are currently available.
Harmonisation. It may be that donors are not, in fact, changing behaviour and practices ‘on the ground’ and that ‘business as usual’ prevails. For example, it appears that there are only a few programme-based approaches in place and there exists little opportunity for shared analysis among key development partners, which work according to different timeframes and agendas. Donor harmonisation in terms of information sharing and consultation, harmonised procedures and processes for reporting and audit remains a problem. Even in countries where a high degree of donor coordination under the leadership of the government happened – for instance after natural disasters like the Asian Tsunami or after major earthquakes – hard won gains in donor-partner country alignment have been threatened by a communication process that heavily relies on large information systems and rigid planning and control procedures instead of applying the lead-partner concept advocated by the Declaration. ‘Cocooning’ in the interest of one’s own organisation or project, and lack of openness to other parties has been the consequence. The lead-partner concept encourages active involvement of all stakeholders in the selection of suitable and technically feasible project portfolios through an inclusive and transparent delegation and consultation mechanism.
Managing for results. Overall, there is a lack of widespread results-oriented, transparent and monitorable frameworks for performance assessment against national development strategies and sector programmes at the partner country level. Sustained partner country capacity development for managing for development results remains perhaps the most serious issue and impediment to development effectiveness at the partner country level. It is noteworthy that partner countries have not been encouraged to identify their capacity development needs as part of their overarching policy frameworks.
Mutual accountability. Donors play an equally crucial role under the Declaration as do partner countries. Commitment of some donor institutions to the core principles of the Declaration is sometimes not evident in the field. They are reluctant to cooperate while paying lip service to country ownership. Also, the increased amount of coordination required for the harmonised activities would require additional financial and staff resources in the field, which in most cases has not been factored in on the donors’ side. Limited capacity and vision by the government can impair its ability to efficiently channel resources and coordinate donors’ assistance.
The issue has been raised that partner countries’ views and needs have been muted in the process of developing the Declaration, which is still seen by some as a ‘donor-driven’ initiative. There is no effective mechanism or clear scope for mutual assessment reviews and for monitoring performance – not only of partner countries, but of donors’ accountability as well.
The road ahead
The Paris Declaration aims to break through the vicious cycle that ‘everyone is concerned and nobody feels responsible’ for joining efforts to reduce poverty and improve the quality of life of the 1.9 billion people who are considered poor in Asia alone. It introduces the principle of mutual responsibility among partner countries and donors, alike. As with the MDGs, the Partnership Commitments represent desirable ambitions of performance and the indicators and targets serve as tools in the process of realising those ambitions.
In the period to 2010, the fact that a target may be missed will be less important than whether partner countries and donors have clear and articulated approaches in each of the areas of concern. All of the Partnership Commitments will require specific, thoughtful responses from the development community, irrespective of the targets themselves. There is a perception that several donors themselves are dragging their feet on the harmonisation and alignment commitments. It is therefore important that concrete steps promoting alignment and harmonisation are identified and implemented, committing donors to actively work together on progress regarding the various indicators. This is a prerequisite for the partner countries to take greater active interest in meeting their set of obligations on aid effectiveness.
Thinking and working ‘outside the box’ appears to be a precondition to meet partner countries needs and meet development partners half-way. This may also require taking a hard look at the underlying development paradigms, which in the name of progress assume a consensus that is questioned by some partner countries. What we need is critical cross-cultural ethical reflection, less ideology, and more pragmatic cooperation without abandoning the Enlightenment belief in at least a minimum set of global values.
Dr. Peter L. Fedon
is a director at the Asian Development Bank and currently heads its Resident Mission in Islamabad.
pfedon@adb.org
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