The document discusses challenges with donor-driven aid and lack of country ownership. It proposes that aid management tools can help address these issues by helping countries clearly articulate their priorities and development strategies, coordinate all resources including domestic and external funding, track aid flows, and strengthen national budget and planning processes. This would allow countries to exercise greater leadership and shift the balance of power in development partnerships away from donors towards national governments. The examples from Afghanistan show how aid tracking systems were adapted to support national budget preparation and allocation decisions.

1. Changing the Balance of Power
Aid Management Tools
Making Aid work:
The Challenges for Aid Coordination and Management
Aidan Cox, UNDP Regional Centre Bangkok

2. Slide 2
Goal
• “Partner countries exercise effective
leadership over their development policies,
and strategies and coordinate
development actions”
– Paris Declaration on Aid Effectiveness

3. Slide 3
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 –
can’t 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

4. Slide 4
Making Aid Work: Solutions?
• “The size of a country’s fiscal space is the
principal measure of ownership – anything
else is imbued with well-meaning
hypocrisy” – Rathin Roy, Manila

5. Slide 5
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

6. Slide 6
Can Aid Management Tools Help?
•Yes!

7. Slide 7
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

8. Slide 8
It’s 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 don’t 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 don’t 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 country’s 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

9. Slide 9
Turning the Pyramid upside down
• Ownership is the building block
– countries in the sub-region have developed
national visions, national development
strategies
The Rome Agenda
Partners
Agenda
Aligning with
Partner’s
agenda
Using
Partners
systems
Sharing
information
Simplifying
procedures
Establishing
common
arrangements
Ownership
Partner countries
Alignment
Donor- Partner
Harmonisation
Donor-Donor

10. Slide 10
Turning the Pyramid upside down
• Ownership is the building block
– countries in the sub-region have developed
national visions, national development
strategies

11. Slide 11
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

12. Slide 12
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)

13. Slide 13
It’s 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

14. Slide 14
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

15. Slide 15
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

16. Slide 16
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

17. Slide 17
UNDP’s 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

18. Slide 18
0
1,000
2,000
3,000
4,000
5,000
2002 2003 2004 2005 2006

19. Slide 19

20. Slide 20
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

21. Slide 21
Basic Aid Tracking
3. Progress against 1382 Budget
Commitments and disbursements made in 1382 will be used to
fund programmes over several years. A substantial financing
gap remains. The Judicial Reform Commission is leading the
collection of financial data, including projected and actual
expenditure for 1382, working in partnership with the Aid Coordination Unit. A critical
financing gap relates to corrections, where only one quarter of needs have been met.
3.3 Justice
0
5
10
15
20
Corrections Secretariat Survey, Infra,
Training
Law Reform Legal Ed &
Awareness
Structure of
Insitutions
Other
Required1382
Committed
Disbursed
Required: 24.87
Committed: 23.86
Disbursed: 17.77
1382 Financial Overview
• Simple
analysis of
commitments
against
budget
requirements
is misleading
• Overstates
success in
year one, and
understates
available
resources for
year 2

22. Slide 22
Better decisions
based on better information
• Guide to real
resource
availability
against annual
budget
requirements
• Shows both
domestic and
external
resources
Transport Budget
Requirements, Commitments, and Funding Allocation ($m)
0
200
400
600
800
1000
1200
2003-4 2004-5 2005-6 2006-7 2007+
Requirements
Commitments
Funding Allocation

23. Slide 23

24. Slide 24
National Budget: Livelihood Programme
• Shows actual
projected
expenditure by
province
• Allows
Government to
promote
geographical
equity

25. Slide 25
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

26. Slide 26
Partnership Forum Mechanism
Government Leadership
Avoiding Macro-Micro Paradox (ADB, Bruce Purdue

27. Slide 27

28. Slide 28

29. Slide 29
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

30. Slide 30
Aid Coordination Unit:
Officer Responsibilities – Donor and Sector

31. Slide 31

32. Slide 32

33. Slide 33
• End of Main Presentation
• Additional slides – background information

34. Slide 34

35. Slide 35
Overview of Donor Pledges

36. Slide 36
Overview by Sector

37. Slide 37
Demo
The default chart appears, in which the
amount by Donors is presented

38. Slide 38
Demo
To change the chart format to 3D, select
the option from the drop down list

39. Slide 39
Demo
To preview and print the current chart,
click on Print Preview.

40. Slide 40

41. Slide 41

42. Slide 42

43. Slide 43

44. Slide 44

45. Slide 45
Government
Website
• Information
sharing
• Transparency
&
Accountability
• Credibility