AID EFFECTIVENESS:Implications for Emerging Donors

Presentation by George CarnerVice Chair and

U.S. Representative to the OECD’s Development Assistance

Committee

OUTLINE

• The Paris Commitments• Plans for Monitoring Progress• Early Baseline Survey Observations• Dilemmas for Emerging Donors• Some Tips• A Golden Opportunity

What makes aid ineffective

Donors develop own plans and programs.

Dispersed effort, suboptimal use of resources

Countries cannot handle these demands.

Result: sub-optimal impact.

Limited country leadership and capacity to plan and implement programs

Too little coordination among donors

Too many projects with different procedures.

PARIS DECLARATION

DEVELOPMENT RESULTS

Ma

na

gin

g fo

r Re

su

lts

Ownership (Partner countries)

Aligning with partners’ agenda

Using partners’ systems

Partners set the agenda

Alignment

Harmonisation Establishing common

arrangements

Simplifying procedures

Sharing information

(Donor — Partner)

(Donor — Donor)

1

2

3

4

THE PARIS DECLARATION

• Concerted action at the country level:– Translating Paris Declaration into local action plans.– Greater coherence among donors and between donors and

partner countries around shared objectives.– More mature partnership based on mutual accountability.

• More ownership by recipients:– Greater ability to plan and prioritize aid. = better PRS– More transparent and accountable aid governance practices

that meet acceptable standards. = strengthened PFM & Procurement Systems

– More direction to aid funded development programmes.

MUTUAL COMMITMENT TO:

• Alignment of aid with country priorities

-- Support PRS implementation, Sector strategies

• Harmonized approaches, lessen burden on recipients through:– More coordinated implementation arrangements.– Less duplicative donor missions, reports…– More reliance on strengthened country systems.– Complementary use of various aid modalities– Transparency on aid delivery (commitments, disbursements…)– Simpler procedures

• Shared Results:– Use of common results frameworks and reporting to measure

impact of plans and programs.– Mutual review of progress.

PLANS FOR MONITORING PROGRESS

• 56 monitorable commitments:– Assessed at country level (CGs, RTs etc.) and…– Monitored internationally.

• 12 Indicators of Progress with measurable targets:– Measure progress of donors and partners.

• Based on “collective” action, building on local processes.

• DAC’s WP-EFF coordinating the international partnership:– Designed methodology & provided technical guidance.

– Aggregating country data and drafting progress reports.

Aim: To encourage and track improvements and behaviour change

• 2006 Baseline Survey and Report

(A summary baseline report will be submitted to the DAC SLM and the final report will be ready by March 07 for HLM and other fora).

• 2008 Progress Survey and Report

(as input for HLF3 in Ghana in 2008)

• 2010 Final Survey and Report

(supplemented by cross- country evaluation, peer reviews, global monitoring).

MONITORING STAGES

Framework of IndicatorsFramework of Indicators

Indicators Survey Desk review

1 Ownership – Operational PRS WB CDF/AER

2a Quality of PFM systems WB CPIA

2b Quality Procurement systems JV-Proc.

3 Aid reported on budget

4 Coordinated capacity dev.

5a Use of country PFM systems

5b Use of country procurement system

6 Parallel PIUs

7 In-year predictability

8 Untied aid OECD DAC

9 Use of programme-based approaches

10 Joint missions & country analytic work

11 Sound performance assessment framework WB CDF/AER

12 Reviews of mutual accountability

EARLY SURVEY OBSERVATIONS

• Progress on ’05 data collection so far, so good.

• Forty countries participating, 30 have submitted data.

• High donor participation covering about 80% of ODA .

• Managing the survey has been very demanding.

• Useful in opening a dialogue.

• Improving understanding of status of aid effectiveness indicators in country and what needs to improve.

• Baselines show starting from a limited base but progress apparent in many countries.

DILEMMAS FOR EMERGING DONORS

• Choice of aid modalities (projects vs. programs )

• Showing the flag vs. joining others

• Assuring accountability vs. using country systems

• Tying vs. Untying of procurement

• Attending to implementation vs. local donor coordination

• Signing onto PD implementation plans

• Managing for results

TIPS: Aid modalities

• Pay attention to partner priorities and local capacity building needs when designing programs

• Consider using program-based approaches:

--For example, favor aligned projects with sector programs over free standing projects

--Try some sector budget support.

• In deciding on implementation modalities, look to maximize complementarity with other donor programs.

TIPS: Using country systems

• Use country institutions, systems, procedures for implementation, financial management, procurement, accounting, and audit, to the extent possible.

• Or if not reliable, use existing donor systems (e.g. WB procurement procedures) rather than creating own systems.

• Join others in strengthening local capacities/systems • Look to favor local sourcing, procurement and

spending through use of local contracts and grants; engaging host country experts, NGOs and firms, and purchasing more goods locally.

• Explore delegated cooperation opportunities.

• Participate in implementing local aid effectiveness action plans and monitoring processes or delegate to other donor.

• Join other donors in endorsing local compacts, MOUs, agreements, to greatest extent possible.

TIPS: Local Donor Coordination

TIPS: Managing for Results

• Build results into your programs at the outset.

• Join other donors in helping strengthen partner results monitoring and reporting systems rather than setting up your own, which are costly and staff intensive.

• Rely on others’ data collection and reporting systems.

A GOLDEN OPPORTUNITY

•As Emerging donors you do not need to retrace the footsteps of longer standing donors.

•You have the chance to set up your development cooperation systems on a 21st Century model

• In spirit of Paris Declaration, adopt best practices to achieve greater aid effectiveness & development impact.