New Directions in the quality of aid debate

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New Directions in the quality of aid debate

  1. 1. New directions in the quality of aid debate: Implications for support to Public Financial Management Stephen P. Groff Deputy Director Development Co-operation Directorate
  2. 2. Outline <ul><li>The Aid Quality Agenda and Commitments </li></ul><ul><li>Assessing Progress </li></ul><ul><li>Paris Declaration Commitments on PFM </li></ul><ul><li>New Actors and New Themes </li></ul><ul><li>High Level Forum on Aid Effectiveness: Implications for the future Aid Quality Agenda </li></ul>
  3. 3. Change ….? Why Change? It’s about making aid work better where it is needed
  4. 4. A Day in the Life of… Source; Don De Savigny & COHRED
  5. 5. Ministry of Health: Kenya
  6. 6. The Aid Quality Journey… 2002 2003 2005 2008 2010 2011 HLF-1 HLF-2 HLF-3 HLF-4 Rome Declaration on Harmonisation Accra Action Agenda Busan 29 Nov – 1Dec 2011 Monterrey Consensus Paris Declaration on Aid Effectiveness Bogota Declaration on SSC Dili Declaration on Fragile States Istanbul principles on CSO effectiveness
  7. 7. The Paris Declaration “pyramid”
  8. 8. Paris Declaration: what makes it different? <ul><ul><li>Unprecedented consensus; </li></ul></ul><ul><ul><li>56 action-oriented commitments for both Donors and Partners countries; </li></ul></ul><ul><ul><li>Built-in mechanism for monitoring progress at country and global levels (12 Indicators); and </li></ul></ul><ul><ul><li>Targets set for 2010 monitored in 3 separate surveys (2005-2011). </li></ul></ul>
  9. 9. Outline <ul><li>The Aid Quality Agenda and Commitments </li></ul><ul><li>Assessing Progress </li></ul><ul><li>Paris Declaration Commitments on PFM </li></ul><ul><li>New Actors and New Themes </li></ul><ul><li>High Level Forum on Aid Effectiveness: Implications for the future Aid Quality Agenda </li></ul>
  10. 10. Progress on track 2005-2008 36% 59% 88%
  11. 11. Targets requiring efforts but within reach (2005-2008) ) 49% 1483 45% 36% 59% 88%
  12. 12. Targets requiring very special efforts (2005-2008) ) 9% 22% (No progress) 49% 1483 45% 36% 59% 88% 43% 42% 42% (slippage) 20% 44% 22%
  13. 13. Outline <ul><li>The Aid Quality Agenda and Commitments </li></ul><ul><li>Assessing Progress </li></ul><ul><li>Paris Declaration Commitments on PFM: Key Messages </li></ul><ul><li>New Actors and New Themes </li></ul><ul><li>High Level Forum on Aid Effectiveness: Implications for the future Aid Quality Agenda </li></ul>
  14. 14. Total donor PFM support, 1995-2008
  15. 15. Paris Declaration and PFM <ul><li>DONORS committed to: </li></ul><ul><li>Provide reliable commitments of aid over a multi-year framework </li></ul><ul><li>Disburse aid in a timely and predictable way </li></ul><ul><ul><li>Rely on transparent partner government budget and accounting mechanisms </li></ul></ul><ul><ul><li>Adopt harmonised performance assessment frameworks </li></ul></ul><ul><li>PARTNER COUNTRIES committed to: </li></ul><ul><li>Publish timely, transparent and reliable reporting on budget execution </li></ul><ul><li>Ensure that national systems are effective, accountable, and transparent </li></ul><ul><li>Take leadership of the public financial management reform process </li></ul><ul><li>Mobilise domestic resources, strengthen fiscal sustainability </li></ul><ul><li>Create an enabling environment for public and private investments </li></ul>
  16. 16. Evidence on PFM: Mixed 49% 1483 45% 36% 59% 88% 45% 43% 47% 21% 44% 9% 26% 24%
  17. 17. ACCRA AGENDA FOR ACTION: Commitments on PFM (2008) <ul><ul><li>DONORS will: </li></ul></ul><ul><ul><li>Use country systems [including PFM systems] as the first option in the public sector. </li></ul></ul><ul><ul><li>Be transparent when they don’t use them. </li></ul></ul><ul><ul><li>Support country-led reform programmes. </li></ul></ul><ul><ul><li>Develop corporate plans for using country systems. </li></ul></ul><ul><ul><li>Channel 50% (or more) of government-to-government aid through country fiduciary systems (i.e. PFM + Procurement) </li></ul></ul><ul><ul><li>PARTNERS will: </li></ul></ul><ul><ul><li>lead in defining reform programmes. </li></ul></ul><ul><ul><li>Strengthen their budget planning processes </li></ul></ul><ul><ul><li>Facilitate parliamentary oversight including through more transparency in PFM </li></ul></ul><ul><ul><li>PARTNERS & DONORS will jointly assess quality of country systems. </li></ul></ul>
  18. 18. What are the different components of the PFM system that aid can “use”? Source: Mokoro (2010)
  19. 19. Challenges in Implementation <ul><li>Many factors lead to donors bypassing country PFM systems </li></ul><ul><li>Varying perceptions of risk </li></ul><ul><ul><li>Emphasis on fiduciary risk </li></ul></ul><ul><ul><li>Developmental risk of not using country systems </li></ul></ul><ul><li>Incentives and capacities in donor organisations </li></ul><ul><li>Political constraints: visibility, traceability... </li></ul><ul><li>Quality of partner country systems </li></ul><ul><li>Shifting transaction costs from partner government to donor </li></ul>
  20. 20. Some common myths <ul><li>Using country systems means providing budget support </li></ul><ul><ul><li>Not necessarily: all aid modalities can make use of country systems </li></ul></ul><ul><li>An “all or nothing” approach? </li></ul><ul><ul><li>Different components of country systems can be used </li></ul></ul><ul><li>Pooled funds are a move towards use of national systems </li></ul><ul><ul><li>They might be, but need to be careful about “second best” solutions </li></ul></ul><ul><li>Technical co-operation cannot make use of country systems </li></ul><ul><ul><li>Need a flexible approach </li></ul></ul>
  21. 21. Working Party on Aid Effectiveness support on PFM <ul><li>Assessing progress (Quality and Use of PFM Systems) </li></ul><ul><li>Global Partnership on Country Systems </li></ul><ul><ul><li>Dedicated Task Forces on PFM and Procurement </li></ul></ul><ul><ul><li>Identifying and disseminating good practice </li></ul></ul><ul><ul><li>Developing and supporting common tools (e.g. procurement assessment) </li></ul></ul><ul><li>Country Level Work </li></ul><ul><ul><li>Lending political support, monitoring, sharing experiences </li></ul></ul>
  22. 22. Outline <ul><li>The Aid Quality Agenda and Commitments </li></ul><ul><li>Assessing Progress </li></ul><ul><li>Paris Declaration Commitments on PFM </li></ul><ul><li>New Actors and New Themes </li></ul><ul><li>High Level Forum on Aid Effectiveness: Implications for the future Aid Quality Agenda </li></ul>
  23. 23. Broadening the Partnership <ul><li>Shaping the global development architecture – i.e. G20 Development Consensus </li></ul><ul><li>G20 discourse (June 2010) on the need for greater transparency, accountability and institutional governance including use of country systems </li></ul><ul><li>Development actors beyond the DAC: </li></ul><ul><ul><li>Non-traditional providers of development assistance (i.e. Middle Income Countries, Emerging Economies, Arab donors etc) </li></ul></ul><ul><ul><li>Civil society organisations </li></ul></ul><ul><ul><li>For-profit private sector and foundations </li></ul></ul><ul><li>Bridging the divide: DAC Statement on “New Partnerships”, Bogota Statement on South South Cooperation </li></ul>
  24. 24. Objectives of Broadening the Partnership <ul><li>Finding convergence and common ground </li></ul><ul><li>Share lessons on economic growth, poverty reduction and development co-operation </li></ul><ul><li>Mutual interest in achieving results while respecting diverse ways to reach them </li></ul><ul><li>Interest in improving all forms of co-operation through inclusive dialogue, mutual learning and knowledge-sharing </li></ul><ul><li>Recall the enduring relevance of the Paris principles for developing countries (fragile states, MICs, LDCs) </li></ul>
  25. 25. New Themes <ul><li>Climate Change Financing </li></ul><ul><ul><li>Cancun pledges = USD 30 billion in Fast Start Finance (FSF) over 2010-2012 with an additional long-term goal of raising USD 100 billion per year by 2020 from public and private sources </li></ul></ul><ul><li>Public Private Partnerships </li></ul><ul><ul><li>Stronger regulatory environments </li></ul></ul><ul><li>Innovative Financing Mechanisms </li></ul><ul><li>Aid as Catalyst towards more Effective States </li></ul>
  26. 26. Outline <ul><li>The Aid Quality Agenda and Commitments </li></ul><ul><li>Assessing Progress </li></ul><ul><li>Paris Declaration Commitments on PFM </li></ul><ul><li>New Actors and New Themes </li></ul><ul><li>High Level Forum on Aid Effectiveness: Implications for the future Aid Quality Agenda </li></ul>
  27. 27. Where are we now? Korea HLF (29 Nov. – 1 Dec. 2011) Monterrey Consensus (2002) Rome HLF on Harmonisation (2003) Accra Agenda for Action (2008) Bogota Statement on SSC (2010) Paris Declaration on Aid Effectiveness (2005) Dili Declaration on fragile states (2010)
  28. 28. 4 th High Level Forum on Aid Effectiveness: A Unique Opportunity <ul><li>Forging a new consensus on aid and development? </li></ul><ul><ul><li>Chance to reinvigorate the global commitment towards the MDGs; </li></ul></ul><ul><ul><li>Refresh and reaffirm Paris / Accra principles; </li></ul></ul><ul><ul><li>Recognise the role of aid as contributor and catalyst for development results and effectiveness; </li></ul></ul><ul><ul><li>Improve the quality of partnerships through embracing partner country leadership, diversity and mutual respect; </li></ul></ul><ul><ul><li>Seek convergence based on complementary strengths and differentiated responsibilities. </li></ul></ul>
  29. 29. Who? Where? When? <ul><li>A political event that attracts ministerial attendance, with decisive outcomes </li></ul><ul><li>Busan , Korea . Host: Government of Korea </li></ul><ul><li>29 November to 1 December 2011. </li></ul>
  30. 30. HLF-4- Main Objectives <ul><li>Stocktaking from the Paris / Accra process </li></ul><ul><li>Agreeing on features of high quality aid and its monitoring framework towards 2015 </li></ul><ul><li>Situating aid in its broader development context: </li></ul><ul><ul><li>More actors, development finance effectiveness </li></ul></ul><ul><ul><li>Diversified approach: MICs, LICs, FS, regions </li></ul></ul><ul><ul><li>Catalyst dimension: trade, security, climate… </li></ul></ul><ul><ul><li>Results and right-based approaches </li></ul></ul>
  31. 31. Emerging Areas for Political Outcomes <ul><ul><li>Results and transparency for better accountability </li></ul></ul><ul><ul><li>Ownership and Leadership </li></ul></ul><ul><ul><li>Effective States and Alignment (Country Systems) </li></ul></ul><ul><ul><li>Diversity at country level – fragile states, middle income countries, LDCs </li></ul></ul><ul><ul><li>Climate Change Financing </li></ul></ul><ul><ul><li>Recognise all forms of partnerships (SSC, PPPs…) </li></ul></ul><ul><ul><li>Role of CSOs, Parliaments and local government </li></ul></ul>
  32. 32. Key milestones in 2011 WP-EFF + ExCOM (7-9 July) WP-EFF + ExCOM (5-7 Oct) 2 nd draft outcome document DAC SLM (6-7 April) WB/IMF Spring Meeting (16-17 April) WP-EFF co-chairs First Narrative Outline for Outcome Document (comments by 3 April) Global Partnership on Country Systems (9-10 June) Task Force on Procurement (May) Task Force on PFM (6-7 June) TBC: Meeting on Effective States (Paris, October) Working Party on Aid Effectiveness Meetings and Key Events HLF4 Evidence Country Systems Q1 Q2 Q3 Q4 4 th High Level Forum on Aid Effectiveness 29 November – 1st December, Busan, Korea 1st draft outcome document Monitoring Survey: country level data collection Evidence for “Progress Since Paris” Deadlines: 31 March Evaluation: Synthesis report (April 2011) Monitoring Survey : preliminary results 1 st draft Progress since Paris (July 2011) Report finalisation (September 2011) Themes for Busan Deadline: January Preliminary Menu of Options WP-EFF EXCOM (9-10 March)
  33. 33. www.oecd.org/dac/effectiveness/pfmWWW.BUSANHLF4.ORG

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