Changing the Balance of Power Aid Management Tools

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Changing the Balance of PowerAid Management
Tools
Making Aid work The Challenges for Aid
Coordination and Management Aidan Cox, UNDP
Regional Centre Bangkok
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Goal

• Partner countries exercise effective leadership
  over their development policies, and strategies
  and coordinate development actions
• Paris Declaration on Aid Effectiveness

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Time to Go Home?

• Lack of ownership
• Donor driven aid
• Lack of clear prioritisation of aid
• Top down
• Unclear accountability
• Poor coordination
• Lack of predictability cant plan effectively

• Direct funding by donors parallel to Govt
• National know-how not tapped
• Aid spread thinly across sectors/locations
• High transactions costs
• Little alignment with national systems

Nepal Presentation
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Making Aid Work Solutions?

• The size of a countrys fiscal space is the
  principal measure of ownership anything else is
  imbued with well-meaning hypocrisy Rathin Roy,
  Manila

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But

• Past performance suggests major donors will put
  only small share through Direct Budget Support
• Even when donors do provide budget support, it
  may come with a raft of conditionalities either
  explicit, or bundled in with technical assistance

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Can Aid Management Tools Help?

• Yes!

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How?

• Philippines
• Government must know what it wants from Donors,
  know its own priorities otherwise aid will
  reflect the priorities of the donors (Jeanne
  Illo)

See Gabriel Acasina Report on Aid Management
Systems
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Its our carpet, not yours

• Be clear on the design then it matters less
  what colour, quantity and quality of silk donors
  are offering ? You can weave them into your
  design
• If some donor offerings simply dont fit you
  can say so
• You can approach some donors to provide specific
  parts
• Your design provides your criteria for deciding
  what assistance to ask for and on what terms you
  are prepared to accept it
• If you dont have a clear design, the pattern
  will be driven by what is supplied and it will
  end up looking all stripy and blotchy.
• If so, then whole process has to go back a step
  donors need to back off and support the design
  process instead.
• Choosing the right carpet design that is
  appropriate to the countrys needs is key - and
  that you then have the skill, time, and capacity
  to implement it
• Aid management then becomes not just about the
  supply of threads, where they fit into the
  design, but also about the ability to build the
  loom, quality of design, knots, etc. 
• Karin Christiansen,
• Research Fellow, Overseas Development Institute,
  London

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Turning the Pyramid upside down

• Ownership is the building block
• countries in the sub-region have developed
  national visions, national development strategies
  

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Turning the Pyramid upside down

• Ownership is the building block
• countries in the sub-region have developed
  national visions, national development strategies
  

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Too many suppliers of silk?

• Even if have strong national vision strategy,
  results will be poor if too much time spent
  dealing with donors
• India High transaction costs recognised, and the
  under 25s asked to work through UN and NGOs
• Cambodia burden of 400 donor missions

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Reducing Costs of Doing Business

• Request Donor focus in 3 sectors only
• Focus improves quality
• Focus means scarce officials deal with fewer
  missions, meetings
• Example of Germany asked to shift sectors
• (Avoid marriage of convenience)

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Its our carpet, not yours

• He who has the gold, makes the rules
• Doc Long, Chairperson of Appropriations Committee
• Using Aid Management Tools to ensure that all
  resources whether through Treasury or through
  UN/NGO/Private sector work to support national
  strategy
• UN required to prepare Business Plans

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Changing the balance of power?
Expertise Knowledge
Expertise Knowledge Accountability
Partnership is not a meaningful term if one
partner has all the resources, much of the
expertise, most of the information and takes
the decisions
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Knowledge can help shift the balance

• Director of Afghan Assistance Coordination
  Authority recognised that a world class aid
  tracking system and team could
• Help mobilise (and sustain) aid flows
• proof of transparency and accountability
• hold donors accountable for delivering on their
  pledges
• ensure donors are funding the sectors which are
  agreed

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Going beyond aid coordination

• Promote integration of external resources within
  a National Development Framework and Budget
• enhance credibility of national institutions and
  domestic decision-making processes all
  assistance (off as well as on budget) goes
  through budget decision making process
• greater influence on allocative decisions
  previously taken independently by donors/UN
  revitalising cabinet
• ensure external and domestic resources considered
  together more rational overall allocation,
  greater chance of investments being
  sustained/maintained
• DAD enables outputs to be monitored, blockages to
  be identified

Credible national institutions processes
prerequisite for alignment
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UNDPs package of support

• Merit-based recruitment and training of national
  team Aid Coordination Unit ? Budget External
  Relations Department
• Secondment of international adviser to Government
• Partnership with private sector
• Contracted in aid tracking expertise Synergy
  International Systems, Donor Assistance Database
  (DAD)
• Establishing Government website

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From Aid Tracking to Budget Management

• In Afghanistan, adapted aid tracking system into
  tool to prepare the Development Budget and
  tried to estimate future recurrent cost
  implications of investments
• Public Investment Programme for each sector,
  backed by data on ongoing and proposed
  investments
• Common financial summary and project document
  format for every project (whether designed by
  Government, donor, UN)
• Foundation for streamlined reporting of progress
  against outputs
• Promotes Government participation responsible
  Ministry for every project. Sign off by Line
  Ministry and donor/UN submission to MoF

Better decision-making resource allocation
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Basic Aid Tracking

• Simple analysis of commitments against budget
  requirements is misleading
• Overstates success in year one, and understates
  available resources for year 2

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Better decisions based on better information

• Guide to real resource availability against
  annual budget requirements
• Shows both domestic and external resources

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National Budget Livelihood Programme

• Shows actual projected expenditure by province
• Allows Government to promote geographical equity

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Government-led Coordination Mechanism

• National Development Forum
• Chaired By Government, prepared by Government
  secretariat
• Governent-Donor Monthly Forum
• Macro and cross-sectoral issues chaired by
  Government, prepared by Governent
• Sectoral CGs every two months
• Chaired by Line Ministry

Making Budget process work Promoting Alignment
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Partnership Forum Mechanism
Government Leadership Avoiding Macro-Micro
Paradox (ADB, Bruce Purdue
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People - the key to results credibility
The Afghan Finance Minister had vision
But he needed a team of people to make it happen
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Afghan Aid Coordination Unit(Became Development
Budget External Relations Unit)

• Transition from International TA to Afghan
  Managers
• Recruited and trained 25 nationals
• Managers
• Donor Desk Officers
• Database team
• Website team
• Translators
• Administration

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Aid Coordination UnitOfficer Responsibilities
Donor and Sector
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• End of Main Presentation
• Additional slides background information

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Overview of Donor Pledges
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Overview by Sector
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Donors is presented
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• Government Website
• Information sharing
• Transparency Accountability
• Credibility