Outcomebased conditionality: Too good to be true

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Outcome-based conditionalityToo good to be true?

• Oslo, 30 October 2007

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But what do we mean when we talk about results?

• When hearing the word results in the framework
  of development, presumably, the average citizen
  would think of people lifted out from poverty
  
• lesser number of women dying at delivery
• more children into schools and less illiteracy
  rates
  
• better health conditions of population in
  developing countries or
  
• less dying every day because of hunger.

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• Outcome-based conditionality means different
  things to different people
  
• Senior IMF official

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The World Bank no conditions, no party

World Bank Outcomes are the short- and
medium-term effects on broader society of
government actions.

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European Commission outcomes measure progress
towards poverty reduction

• The EC understands that results are indicators
  used at the level of the effectiveness,
  coverage or uptake of public service delivery
  related directly to poverty reduction.
• Typically, indicators cover
• enrolment of boys and girls at school, net
  enrolment, primary school completion rate,
  
• vaccine coverage,
• rate of assisted delivery,
• and of women covered by family planning or
  other MDG indicators.

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Expectations for outcome-based conditionality

• Encourage a focus on results by using
  indicators of
  
• service delivery / poverty reduction
• Protect the political space for Governments to
  determine
  
• policy
• - Streamline conditionality
• Allow graduate response to partial performance
  instead of all
  
• or nothing
• - Promote domestic accountability
• - Stimulate demand for quality data on poverty.

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How does the EC approach work?

• Negotiation of PAF by the joint donor group the
  EC negotiates insertion of outcome-based
  indicators
  
• The EC decides which outcome-based indicators
  will be included in the Financing agreement and
  operationalises the disbursement details
  
• The EC uses the annual joint reviews of the group
  of donors to decide the share that is going to be
  released
  
• If there is no agreement on the percentage to be
  released, the Article 96 of the CPA applies
  

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What has been the impact?Cases of Burkina Faso,
Mozambique and Tanzania

• Creating incentives for poverty reduction
• 71 of the variable tranche released
• Positive joint annual reviews targets met
• Alternative sources, not so positive...
• B) Opening-up policy space
• Lower number of conditions but overall
  increase in PAFs
  
• No changes noticed in ownership / country
  leadership
  

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Number of conditions in EC Financing agreements
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Assessment and operational challenges

• Conditionality baskets and data availability
• Not enough funds to make a difference
• Cryptic data failing to improve downwards
  accountability
  
• Outcome-indicators a cure or a curse?
• Long term commitments VS short term
  disbursements
  
• Limited civil society participation

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Share of budget support linked to social sector
outcome indicators
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How do PAFs look like?
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Political challenges

• 1. Joint budget support groups
• - contextual burdens and little EC leverage WB
  and EC battle over influence in donor groups
  
• 2. But also long-standing power imbalances in aid
  relationships
  
• - i.e. Article 96
• - indicators reflect EC political priorities?

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Tentative conclusions and recommendations

• Positive effects
• OCB has pushed a results based approach
• Partially achieved to streamline conditions
• Real concerns remain on attribution,
  predictability,
  
• Can further potential be unleashed? Remains
  unanswered but
  
• Improve process including CSO participation
• Improve indicators (including choice of)
• Improve collection and disclosure of data
• Yearly assessments?
• Revise technical complexities

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• By Nuria Molina-Gallart
• nmolina_at_eurodad.org
• www.eurodad.org

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