Chapter 3 The Paris Declaration Does Not Go Far Enough

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The Reality of Aid 2008

Chapter 3The Paris Declaration

Does Not Go Far Enough

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Introduction

Chapter Three: The Paris Declaration doesnot go far enough - it fails to recognizehuman rights as the heart of developmentpolicy

Given that aid relationships are stillrelationships of power dominated by theIFIs, the Paris Declaration might seem to bea beacon of light foreshadowing a betterreality. However, the authors in this thirdchapter of the 2008 Reality of Aid reportargue that it does not go nearly far enough.

Philippines

The NGO IBON in the Philippines arguesthat, whilst the PD declares that it is aboutgreatly improving the quality andeffectiveness of aid, the unfortunatereality is that it serves to reinforce or evenaggravate some of the more undesirableaspects of aid to its country. This hasserious implications for the progressiverealization of human rights in the Philippines– and may even prevent this from takingplace.

The article points out that the PD ismainly about technical and proceduralefficiency in the management of aid and ittends to reinforce the lack of a rights-basedapproach. It is fundamentally limited by itsnarrow analytical framework, which is notdesigned with human rights in mind. This iswhat makes the PD as it stands so dangerousin the Philippine context.

From the point of view of therealization of human rights, the PD’s most

serious flaw is that it maintains ODA as aninstrument for donors to advance theirinterests rather than to foster democraticgovernance. ODA is a major source of publicfinance and donors wield tremendousinfluence over the country’s social andeconomic policies. Unfortunately, the PD asit stands noticeably sidesteps the need toreduce this influence.

The PD not only avoids the issue ofpolicy conditionalities, but actuallyaggravates the situation in a way that cutsacross the PD’s declared principles. Forinstance, the PD indicator on ownership -“partners having operational developmentstrategies” - ignores how these strategiesare themselves already strongly influencedby donors. The PD fails to address thereality of alignment along neoliberaleconomic lines with a narrowing of thediscourse about alternative policy options.

Similarly, the harmonization beingapplied serves more to strengthen donordomination of the aid system vis-à-vis thePhilippines, rather than enabling a human-rights-based approach focused on genuinenational, regional and local needs,particularly of the poorest and mostmarginalized.

The CBM

The NGO CBM points out there are severalpositive aspects to the Paris Declaration(PD) including commitments to engage “abroad range of development partners” increating national development strategies.

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“Broad consultative processes” should beused to engage parliaments, NGOs andcitizens.

However, the step taken by the PD,whilst welcome, is definitely too small. Thepaper argues that the commitments madeare weak and do not set out a clear agendaof promoting democratic participation indevelopment policy-making. Nor does itreally promote the principle of subsidiaritywhich says that a central authority shouldperform only those tasks which cannot beperformed effectively at a more immediateor local level.

Ultimately, the PD focuses too stronglyon an aid effectiveness agenda dominatedby governmental national developmentstrategies and not enough on developingdemocratic ownership of developmentpolicies including the range of relevantstakeholders. The PD lacks a focus onhuman rights and the organisations that canhelp deliver such a focus, such as CSOs,which can help bridge the gap betweenthose in power and those in need ofservices.

Given these limitations, it is unlikelythat the PD by itself will be able to bringabout the required developmenteffectiveness to alleviate severe problemssuch as poverty, hunger, disease and under-education in developing countries. It hastaken a step in the right direction, butmore steps are now needed to achieve thenecessary rights-based focus and approach.

Bissio

This detailed paper assesses the differentindicators for each of the five PD principlesand shows that they do not have a clearfocus on achieving the progressiverealization of social and economic rights.Human rights and the right to developmentin particular are not mentioned. Rather,they only refer to how aid is managed anddelivered.

The paper claims that rather thancreating a partnership of equals, the PD

contains several preconditions thatdeveloping countries have to meet, withoutcalling for reciprocal efforts from donors.Recipient countries are penalized if they donot implement the conditionalityframework, but they have no way ofpenalizing their donors/creditors.

The effectiveness of aid delivery andmanagement, as measured by the PD, doesnot assess the impact of aid on povertyreduction or realization of human rights.While it might be expected that moreefficient aid will contribute positively toboth objectives, the 12 indicators could infact be reviewed positively without anymeasurable impact on either. Worse, theimplementation and assessment of the PDimplies risks to the right to developmentagainst which no insurance, complaintmechanisms or exceptions are provided.

The reality of the PD is that it creates anew level of supranational economicgovernance above the World Bank and theregional development banks. By aligningbilateral and multilateral donors aroundcertain governance requirements, it mighteven serve to undermine local democraticprocesses and the “policy space” thatdeveloping country governments need tomake their own plans.

Afrodad

This article from the African Debt andDevelopment Network looks at theimportance of the Paris principles ofharmonization and alignment to aideffectiveness. It argues that the principlesthemselves will not lead to greaterdevelopment effectiveness unlessaccompanied by progress in democraticownership. Harmonization and alignmentmust be seen as necessary, but notsufficient conditions for developmenteffectiveness.

The article recognizes that there havebeen positive efforts towards harmonizationin Africa around joint missions, commonanalyses of situations and performance, and

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the development of Sector WideApproaches (SWAps). Also, the PovertyReduction Strategy Papers (PRSPs) haveopened doors to various levels of nationalownership of the strategies, which haveimproved with the second generation ofPRSPs. Several examples are presented fromAfrican countries.

However, if democratic processes donot inform the development of policy in thefirst place, then alignment is undermined -there needs to be a true domestic politicalagenda for donors to align to. Similarly,harmonization under these conditionspresents as many dangers as it doespotential benefits, since donors are notharmonizing around a strong domesticagenda, but may be using theirharmonization to exert even greaterinfluence over national policy priorities.

To truly implement the principles ofharmonization and alignment, the nationaldevelopment strategies must be fullynational and legitimate. The major barriersto the achievement of this legitimacy areset out as: (1) lack of aid predictability; (2)continued use of aid conditionalities andtied aid; (3) poor governance; (4) lack ofaccountability; (5) weak local capacity; (6)and lack of involvement of CSOs.

The crucial issue is that the principlesof harmonization, alignment and democraticownership are actually interdependent -only if all of them are followed will aidpolicies become effective at promotingoptimum development.

Conclusions

The Paris Declaration may appear to be amajor step towards better aid and betterdevelopment, however in reality it flattersto deceive. Whilst making some good noisesaround key principles and ideas such asparticipation, it totally fails to deliver anapproach focused on the achievement ofpeople’s rights or the right to development.

The Declaration does nothing toredress the imbalance between donors andrecipients, and therefore its principlesbecome distorted. Harmonization tends tostrengthen the power of donors overrecipients by reducing choice, andalignment is seen to be achieved throughthe use of national development strategiesthat have themselves been stronglyinfluenced by donors. Mutual accountabilityis impossible given the current imbalance inpower and the PD does not change this.

The Declaration is more about technicaland procedural efficiency in aid than aredirection of the philosophy of aid basedon democratic participation in developmentpolicy-making. The PD will therefore not beenough to deliver the required developmenteffectiveness to alleviate severe problemssuch as poverty, hunger, disease and under-education in developing countries.


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Aid and the Rights-Based Approachin the Philippines

Sonny AfricaIBON Foundation

There is still much to be done in terms ofapplying the rights-based approach (RBA) toofficial development assistance (ODA) in thePhilippines. The barriers have to do bothwith the unduly donor-defined character ofaid as well as with current limitations in thecountry’s internal aid processes.

On paper and in terms of firstprinciples, there appears to be a solid basisfor a comprehensive rights-based approachin the Philippines. The right to developmentis enshrined and elaborated at length in thecountry’s Constitution. The government isalso a signatory to most United Nations (UN)Covenants and human rights instruments.These presumably establish the legalpremises for ensuring that aid policies inthe Philippines are consistent withinternational human rights standards andactually use them as their framework forimplementation. Unfortunately, however, thegovernment – as with governments in manyother countries – still has a tendency tocompartmentalize its human rightsobligations. Combined with the pressureexerted by donors, human rights areneglected and overlooked in aid policies.

Within this context, the ParisDeclaration (PD) on aid effectiveness, as itstands, unfortunately serves to reinforce oreven aggravate some of the moreundesirable aspects of aid to the country.This has serious implications for theprogressive realization of human rights in

the Philippines and may even prevent thisfrom taking place.

Undermining Socio-Economic Rights

Social and economic rights are always fullyacknowledged and well-articulatedwhenever they are brought up in UN andUN-related forums. Many commitments aremade. Yet these same obligations areconspicuously absent, or given only lipservice, in the vital forums relating tointernational trade and finance or todomestic macroeconomic policies. Thisgreatly undermines human rights effortselsewhere, given the far-reaching impact onpeople’s lives, livelihoods and welfare ofthese policies.

The Philippine state, being the onlyinstitution with the official mandate andauthority, is of course ultimately responsiblefor domestic policy. Nevertheless,understanding where the direction of thesepolicies comes from is crucial. In currentpolitical conditions, this directionunfortunately comes disproportionatelyfrom local elites, foreign corporateinterests and the international financialinstitutions (IFIs) rather than from the broadmajority.

For several decades now, multilateraland bilateral aid has come with invariably“free market” policy conditionalities

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designed to benefit the narrow interests ofthe dominant domestic and internationalpolitical groups. These conditionalities havebeen explicit and formally contained in ODAagreements as well as leveraged throughthe extended ideological remolding ofdomestic policy-making elites. Sadly, theyhave compromised the incomes, livelihoodsand strategic well-being of millions ofFilipinos.

The economy has certainly beenopened up and is now amongst the mostopen in East Asia. The share of trade ingross domestic product (GDP) has doubledand the share of foreign investmentquadrupled between 1980, when suchconditionalities started to be imposed inearnest, and 2007.1 The manufacturingsector is a smaller share of the economythan in the 1960s as well as the mostforeign-dominated it has ever been.Agriculture’s share in the economy is at itslowest point in history; agricultural tradedeficits have been rising since the mid-1990s and the country is more dependentthan it has ever been on imported food.

This distortion of the economy hasimpacted negatively on the population. Thecountry’s productive sectors are morebackward than ever, which underminesincomes, job creation and prospects forbroad-based development. Economicgrowth in 2007 was the fastest in threedecades and among the most rapid in theregion. Yet, tellingly, the period 2001-2007was also the worst seven-year stretch ofrecorded joblessness in the country’shistory with an average annualunemployment rate of 11.3 percent.2 Some11 million Filipinos out of a labor force of 38million were jobless or underemployed in2007.3 This job crisis has forced some 3,000Filipinos a day to look for work abroad;there are now 9-10 million overseas Filipinoworkers (OFWs), around 10 percent of thepopulation, scattered in over 190countries.4

Unsurprisingly, poverty has continuedto worsen. Using a poverty threshold ofUS$1 a day (at market exchange rates),

there were 27.6 million poor Filipinos, or anincrease of 2.1 million between 2003 and2006. If a less extreme poverty thresholdfigure of US$2 per day is used the numberof people living in poverty more thandoubles. In any case, official povertyincidence has increased from 30 percent to33 percent over the same period.5 All told,Filipinos’ right to development has beenseverely compromised by conditionalitiesand their attendant economic outcomes.

Undermining Socio-Economic RightsThrough Donor Preferences

The Philippines, like hundreds of otherunder-developed countries, faces resourcegaps in virtually all areas of social andeconomic policy. In this context, aid ispresumed to go towards helping reachambitious development goals such ascutting poverty in half, reducing childmortality by two-thirds and ensuringuniversal primary education. However, thecountry’s overall aid profile revealscollective donor preferences that preventaid from going to where it is most neededsocially.

The need for greater public investmentin health and education is unambiguous.State health expenditure has been steeplydeclining and was down to 0.28 percent ofGDP in 2007 from 0.44 percent in 2000 andfrom a peak of 0.74 percent in 1991;education spending in turn went down to2.5 percent of GDP from 3.5 percent in 2000and a peak of 4.0 percent in 1998.6

Yet rather than targeting these urgentareas, the largest part of on-going ODAloans still goes to infrastructuredevelopment. Infrastructure accounted forUS$5.5 billion in 2006, or 57.5 percent ofthe total (down from its recent peak of 69percent in 2001).7 On the other hand, onlyUS$1.2 billion or just 13.0 percent of totalloans went to social reform anddevelopment. Although this is double theshare of five percent in 2000, theproportion is still too low. Furthermore,


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most of this was even accounted for byUS$723 million in various program loancommitments geared towards further healthand education sector privatization andcorrespondingly reduced nationalgovernment outlays in the future.8 AnotherUS$100 million was for a local community-focused program – the KALAHI-Comprehensive and Integrated Delivery ofSocial Services (KALAHI-CIDSS) – which hasbeen criticized for being implemented onthe ground in the context of counter-insurgency.

The overall aid profile indicates thetendency of aid to reinforce rather thanremedy basic distributive problems in thecountry’s official development strategies.Most aid goes to infrastructure in areas ofthe country with relatively high-valueeconomic activity or to projects with directeconomic returns rather than to socialservices and to remote areas whereoutcomes are less visible or not immediatelymeasurable. Infrastructure projects tend tobe located where transnational firms canmost benefit from their use. A scan of thelist of ODA loan commitments in 2006 showsthat at least a third of these projects areidentifiably implemented in and around thecountry’s National Capital Region (NCR),where over half of the country’s economicactivity is found.

More aid could usefully go to socialservices and to remote areas where thePhilippine government is weakest anddevotes insufficient resources. Instead, andparticularly in the context of economicpolicy conditionalities, aid currently tendsto buttress the inequitable status quo anddeliver benefits to a narrow cross-section ofthe domestic population and for foreigncorporations in the country. Limitations inthe current aid system need to beaddressed to remedy this.

No Rights-Focused Monitoring of Aid

The country’s aid system is limited by itsexcessive focus on mainly financial and

procedural matters at the expense ofdevelopmental processes and outcomes.The narrow parameters of the country’s aidsystem are starkly evident in the informationgenerated for the management of aid. Thebasic ODA legislation specifies three majorofficial bodies to oversee the aid system:the economic planning agency NationalEconomic and Development Authority(NEDA); the Commission on Audit (COA); anda Congressional Oversight Committee on ODA(COCODA). There are two major annualreports by the country’s main official aid-related bodies: the annual COA audit reportand NEDA’s annual ODA review. These tworeports are essentially concerned withexpediting aid flows and do not concernthemselves with the developmentaloutcomes (or otherwise) of ODA programs orprojects.

The NEDA review provides a basic profileof the aid portfolio covering distribution bydonor, sector, recipient agency and theextension or cancellation of loans. There isan assessment of “performance,” but onlyaccording to financial indicators of“disbursement”, “availment” and “projectcosts”. There is a section onimplementation issues and measures but,again, these are largely related tobudgeting, financing and absorptivecapacity matters. The NEDA apparently evenceases monitoring projects once they arecompleted.9

The COA report is an even morestraightforward and detailed financialaccounting of aid. The COCODA potentiallycreates an opening for more developmentalconsiderations and involvement of citizensand civil society. However, this was onlyconvened in 2005, almost a decade afterbeing created by law, and even so stillremains basically dormant.

The absence of indicators on povertyreduction, human rights or development is aclear sign that these are not among theguiding principles of ODA in the country.What is missing, but which should be one ofthe most important factors to be closelymonitored, is the extent to which aid


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allocations are actually going to thegeographic regions, income classes andmarginalized sectors that are most in needand to what extent it protects andpromotes rights.

Civil society groups have tried to makeheadway at the project level and, to amore limited degree, in national policy-making. Yet these efforts are severelylimited by the overall absence of detailedinformation and the lack of CSO familiaritywith project complexities, aggravated by ageneral lack of transparency. Perhaps a fewdozen aid projects out of many hundredshave been scrutinized in the last decade.The overwhelming bulk of the value of ODAhas, in short, escaped more detailed study.

The lack of a rights-based approach inthe country’s aid system reflects the lackof a rights-based approach in the country’sdevelopment policy-making in general. Thisin turn reflects the need for moredemocratic governance better able to takemeasures that respect, promote, protectand fulfill the right to development. ThePhilippines, however, remains saddled bystructural political and economic inequitieswhich the aid system does little to address.

Unfortunate Consequencesof the Paris Declaration

The Paris Declaration declares that it isabout greatly improving the quality andeffectiveness of aid. However, it tends toreinforce the lack of a rights-basedapproach. The PD – like the COA and NEDAreports – is mainly about technical andprocedural efficiency in the management ofaid. It is fundamentally limited by its narrowanalytical framework which is not designedwith human rights in mind. This is whatmakes the PD as it stands so dangerous inthe Philippine context.

From the point of view of therealization of human rights, the PD’s mostserious flaw is that it still regards ODA as aninstrument for donors to advance theirinterests rather than to foster democratic

governance. ODA is a major source of publicfinance; where it is directed and how it isused has a strong influence on the domesticpolicy-making landscape. At the same time,the Philippine state is still weaklydemocratic and correspondingly unable tomore strongly embrace a human rightsframework or assert this vis-à-vis aid. Thus,ODA donors wield tremendous influenceover the country’s social and economicpolicies. Unfortunately, the PD as it standsnoticeably sidesteps the need to reducethis influence which has far-reachingimplications.

Conditionalities and their associated“free market” policies have resulted in suchadverse human development outcomes inthe country that they must be a centralconcern. Yet in the context of thePhilippines, the PD not only avoids this issuebut actually aggravates the situation in away that cuts across the PD’s declaredprinciples. For instance, the PD indicator onownership – “partners having operationaldevelopment strategies” – ignores howthese strategies are themselves alreadystrongly influenced by donors. The decadesof sustained political, ideological andeconomic pressure from donors pushingneoliberal policies has actively underminedthe Philippine government’s capacity toeven conceive of more democratic notionsof fair and development-oriented trade andinvestment based on human rights.

Amongst others, the World Bank (WB),Asian Development Bank (ADB), UnitedStates Agency for International Development(USAID) and the Japanese government haveall invested heavily in national policy-makingprocesses. Aside from various “multi-stakeholder” development forums, theyhave also directly funded government lineagencies, private think-tanks, academic andmedia bodies, and even CSOs.

This sustained technical assistance,sponsorship of research and conferences,funding of joint projects and other fundingrelationships have had a strong influence.The overall effect has been alignment alongneoliberal economic lines and a narrowing


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of the discourse about alternative policyoptions. It is highly likely that there is prior‘self-censorship’ and ‘adaptation’ from thePhilippines to meet donor preferences.These are among the factors that havecontributed to the development ofconsecutive five-year official Medium-TermPhilippine Development Plans (MTPDP) sincethe 1980s that chart out the rapid openingup of the economy.

Moreover, the PD’s promotion ofharmonization also seems to be more aboutenabling donors to more efficiently achievetheir individual and collective ends ratherthan about fostering a human-rights-basedapproach in the recipient countries. Themany recent harmonization efforts10 haveincluded policy coordination through thedonor-dominated Philippine DevelopmentForum (PDF) and common arrangementsamong external partners. The WB andEuropean Union (EU) have agreed to usecommon appraisal, reporting, auditing andreview procedures and to undertake somepooling of funds. Other partners, includingthe ADB and the German government, areundertaking joint planning and reviewarrangements for their health-relatedprograms. Unfortunately, this harmonizationserves to strengthen donor domination ofthe aid system vis-à-vis the Philippines,rather than enabling a human-rights-basedapproach focused on genuine national,regional and local needs, particularly of thepoorest and most marginalized.

Conclusion

A new approach to aid effectiveness thatmore genuinely advances socio-economicrights is required in the Philippines andother developing countries. There are keyelements that should be part of such anapproach. These include consideration oflarger issues such as the imbalance ofpower between donors and recipients andof structural inequities in income andwealth. There should be greater attentionto participatory and democratic processesas well as giving priority to developmentaloutcomes. Greater efforts on thegovernment side to institutionalize such anapproach are vital.

At the same time, greater CSOinvolvement and engagement would provideadditional momentum as well as beingimportant for sustaining such an approach.Philippine CSOs have by no meanscollectively and fully internalized andimplemented the rights-based approachthemselves. Yet generally they nonethelesshave a track record of adhering to humanrights principles and developmentalpractices. Many were indeed consciouslyformed as a counterpoint to acknowledgedgovernment bureaucratic inertia anddisconnectedness from the grassroots level.These are relative advantages that would bemost productive in helping build ademocratic aid system that more decisivelyaddresses the long-standing problems ofPhilippine poverty, inequity andunderdevelopment and promotes humanrights.

Notes

1 IBON computations on data from the BangkoSentral ng Pilipinas (BSP) and the United NationsConference on Trade and Development (UNCTAD) on-line database.

2 IBON computations on data from the NationalStatistics Office (NSO) Quarterly Labor ForceSurveys (LFS).

3 Ibid.

4 IBON estimates based on data from the PhilippineOverseas Employment Administration (POEA) andthe Department of Foreign Affairs (DFA).

5 National Statistical Coordination Board (NSCB),2006 Official Poverty Statistics, March 5, 2008.

6 IBON computations on national governmentexpenditure data from the DBM.


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7 Unless otherwise noted, all ODA donor loan datafrom the National Economic and DevelopmentAuthority’s (NEDA) 15th Official DevelopmentAssistance Portfolio Review (2006).

8 Covering the WB’s Second Social ExpenditureManagement Program (US$100 million), SocialExpenditure Management Program (US$100million), National Program Support for BasicEducation (US$200 million), and National SectorSupport for Health Reform (US$110 million) and theADB’s Health Sector Development Program (US$213million). COA ODA Audit Report 2006.

9 NEDA reply to a query from a member of theCongressional ODA Oversight Committee (COCODA),noted in the minutes of a meeting of the COCODA atthe House of Representatives (HOR) on November14, 2006.

10 NEDA, Report On The Baseline Study And Survey OfThe Government Of The Philippines’ ComplianceWith The Paris Declaration Commitments, February2008.


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Democratic Ownershipand the Paris Declaration

Thomas HochgesangCBM (formerly Christian Blind Mission)

Introduction

This article reflects on the strengths andweaknesses of the Paris Declaration topromote effective development policies.Particularly, it examines who owns anddrives the development process, looking atthe role of citizens, parliaments, CSOs anddonors. When looking at the overallintegration of aid resources intodevelopment objectives at country level,the article takes into account governmentalleadership of partners including democraticprocesses of relevant institutions as well asthe political will and capacity to promotedevelopment objectives.

The Paris Declaration

The Paris Declaration on Aid Effectiveness isa voluntary agreement of governments andmultilateral institutions who realised therewere flaws and insufficiencies in their aiddelivery systems. It focuses on theeffectiveness of aid, as a necessary, thoughnot sufficient, element in achievingsustainable socioeconomic developmentwithin the briefest terms and at the lowestpossible transaction costs. Since thisinitiative on aid effectiveness has beendonor-led under the umbrella of the OECD’sDevelopment Assistance Committee, wewould like to examine how, according tothe Paris Declaration, a people-centred

development process can be ensured bysouthern civil society and their parliamentsand governments, and supported by thedonor community.

Civil Society Organisations have longasked that ownership of developmentdecisions be given to Southern countries,enabling them to direct their owndevelopment with reinforced capacities andby means of participatory and transparentprocedures. The Paris Declaration, incontrast, neither talks about democraticownership nor about the poorest and mostvulnerable populations as priority targetgroups of development efforts.

There are some positive aspects of theParis Declaration:

• countries commit to “Exerciseleadership in developing andimplementing their nationaldevelopment strategies throughbroad consultative processes.”(Partnership Commitment 14)

• furthermore, there is a specificreference to Civil Society at thecountry level: “Partner countriescommit to take the lead in co-ordinating aid at all levels inconjunction with otherdevelopment resources in dialoguewith donors and encouraging theparticipation of civil society…”(Partnership Commitment 14).

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• it agrees that governments anddonors should “…reinforceparticipatory approaches bysystematically involving a broadrange of development partnerswhen formulating and assessingprogress in implementing nationaldevelopment strategies.”(Partnership Commitment 48).

• it also recognises that bothparliaments and citizens should beenabled to monitor officialdevelopment expenditure. Donorsare asked to provide better“…information on aid flows so as toenable partner authorities topresent comprehensive budgetreports to their legislators andcitizens” (Partnership Commitment49).

• with regard to failing states, theParis Declaration says in PartnershipCommitment 39: “Donors shouldmake maximum use of country,regional, sector or non-governmentsystems”.

Failings of the Paris Declaration

From the point of view of CSOs like CBM -an international organisation concernedwith disability and development andlobbying for a more transparent andeffective aid system - the initiative of theParis Declaration is long overdue andwelcome but definitely too small a step inthat numerous aspects of developmenteffectiveness are not considered to theirfull extent, or worse, not at all.

The commitments made are quite weakand do not set out a clear agenda forpromoting democratic participation indevelopment policy-making. They certainlydo not acknowledge the necessity ofadvocacy work in countries whereparticipation of all groups of civil society in

resource allocation needs to be initiated orstrengthened.

The Declaration’s effort needs to bebetter geared toward poverty reduction,democracy-building, human rights, equitybetween southern and northern countriesand within countries, and social, economicand environmental sustainability.

Also, the Paris Declaration does notreally promote the principle of subsidiaritywhich says that a central authority shouldperform only those tasks which cannot beperformed effectively at a more immediateor local level.

The Paris Declaration’s principle of‘ownership’ refers first of all to theauthority that ODA-receiving partnergovernments exercise over the formulationand management of their policies andstrategies, and over the coordination oftheir own development actions; theDeclaration does not say much about theCSOs’ role in that process.

Similarly, encouraging information on aidflows does not by itself ensure that thepublic and parliaments will be well informedby their governments. Definitely more needsto be done and it has to be asked whetherdonors could not inform the public onagreements with partner governmentsproactively, providing civil society with themeans to enquire with their national,intermediate level and local governmentshow development funds are being spent.Democratic ownership only exists incombination with transparent informationpolicies and practice of both governmentsand donors.

The Crucial Role of CSOs

Sustainable development cannot beachieved if citizens are not involved in a realand effective manner in the process. Thepolitical will and institutional capacities ofreceiving governments and donor entitiesare important, but they are not sufficientto ensure the sustainability of development.The desired results will only be obtained if


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CSOs actively participate in all relevantprocesses. 1

Civil society could and should play arole in national aid allocation. Truedemocratic ownership exists only when allgroups in society can have a say in theformulation of development strategies andplans. CSOs, with their grassroots approach,possess comparative advantages that canhelp bridge the gap between those inpower and those in need of services.

CSOs help build up social andinstitutional infrastructures on the ground,especially in the poorest and failing states.CSOs are a source of independentinformation and analysis, being independentof either governmental or businessinterests. Although not always directlygrassroots, they often come the closest toengaging directly with those citizens mostaffected by, but least heard in, policy-making.

One of CSOs’ main tasks is to monitorgovernment actions and support theinformation flow. Transparent informationavailability is a prerequisite for achievingbetter accountability of governmentstoward their citizens. Thus, independentCSOs in their role as “watch dogs” help thepublic better understand how governmentsallocate resources. Through that service tosociety they also create incentives forgovernments to become more transparent.

If donors are serious about democraticownership and civil society involvement,they cannot continue to just negotiate witha select group of functionaries, behindclosed doors, and according to rules andconditions imposed by the donorsthemselves. Consultations with SouthernCSOs should not be held at the last minutein order to present positions that havealready been formulated, agreed upon andestablished by donors. Even where CSOs inthe North are lucky enough to be consultedby donors, this is not a substitute forconsulting with the groups on the groundmost affected by development realities.

Challenges to the Effective Role of CSOs

• Accountability

The increasing power of NGOs hasprompted many groups to question theroles and responsibilities of these newglobal, ‘non-state actors’. It has beenargued that CSOs often “lack thetransparency and accountability interms of finances, agenda, andgovernance necessary to effectivelyperform their crucial role in democraticcivil society.”2 Ironically, this is exactlywhat CSOs often attack governmentsand donors for.

Nevertheless, this potential lack oftransparency in the CSO sector isperhaps their greatest vulnerability, andmust be addressed internationally toensure the integrity and continuity ofthe work of CSOs. If they aim to beconsidered more accountable to thosethey work for, CSOs need to reportmore clearly about the size and originof their funds and about the objectivesand impact of their work.

A dependency on official funds canweaken the role of CSOs as watchdogs.Even where the government does notactually impinge upon their ability tooperate, the dependency can damagethe public perception of the CSO’svoice. This is an extremely difficultissue.

CSOs often work towards animmediate effect on the well-being ofpoor target groups. However, they arealso increasingly aware of the necessityto engage with policy-making and towork to support the evidence base foreffective policy making. This can beseen in their involvement in initiativeslike “NGO Impact on Development,Empowerment and Actions” (NGO IDEAs)or the International Initiative for ImpactEvaluation (3ie).


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Another complex issue is CSOaccountability in repressive stateswhere governments can easily useinformation on target groups,objectives and impact to prevent CSOsfrom working effectively for poor andmarginalised parts of the population.Full accountability in such cases maybe counter-productive to thelegitimate aims of CSOs and the groupsthey are working with.

Some donors and politicians wouldlike CSOs to become subject to theParis Declaration themselves. Othersfear for the consequences on thediversity of CSOs’ work as a laboratoryfor new approaches in development.One thing, however, is clear: Given thepower imbalance between thosedisbursing funds and implementingprojects on the one side and thegeneral public on the other, thepriority must be on improving donors’and CSOs’ accountability towardsdemocratic forces.

• Harmonization and alignment

In the Paris Declaration, donors agreedto build systems in a co-ordinatedapproach aligning their procedures andreporting systems with nationalgovernments and harmonising and co-ordinating their work with otherdonors. The quest for alignment andbetter horizontall harmonization alsoapplies to CSOs to avoid duplicationand increase effectiveness.

There is, however, a delicatebalance to strike on the side ofalignment and harmonization with theofficial sphere. There are dangers ofCSOs’ being fully co-opted by theirgovernments or donors. Particularly incountries where certain groups of civilsociety are left out of governmentplans (e.g. minorities and indigenouspeoples, certain religious groups,persons with disabilities, etc.), CSOs

need to play a vital role to compensatefor that. It is essential that they areable to contrast their position with thegovernments’ policies.

Although being, from one point ofview, a reasonable request,harmonisation bears further dangersfrom various perspectives:

• ‘Extra-CSO’ perspective: CSOs couldbe (mis-)used by donors as ‘cheapconsultancies’ to pursue donors’or, in the best case, partnergovernments’ objectives.

• ‘Inter-CSO’ perspective: CSOs in‘over-harmonising’ their work wouldneed to use increasingly more timeand money to co-ordinate withother CSOs instead of deliveringservices or carrying out advocacywork.

• ‘Intra-CSO’ perspective: CSOs mightlose their position as independentgrassroots development actors intheir own right, becomingsomewhat ‘institutionalised’ andlosing sight of the organisation’starget group and thus, the right ofinitiative.

The Paris Declaration and Parliaments

In Partnership Commitment 48, thesignatories of the Paris Declaration agreedto “strengthen as appropriate theparliamentary role in national developmentstrategies and/or budgets” to strengthenmutual accountability.

This commitment reads very well and,indeed, it could be a useful first steptowards genuine parliamentary involvement,thus strengthening democratic ownership ofaid and therefore development policies.However, the commitment is in fact far tooweak and fails to imply any serious practical


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commitment to increase the role ofparliaments in aid policies.

They also commit to “reinforceparticipatory approaches by systematicallyinvolving a broad range of developmentpartners when formulating and assessingprogress in implementing nationaldevelopment strategies.” This could includeboth parliaments and CSOs, but is clearlyunspecific in terms of genuine commitmentin this regard.

In order to improve the alignment of aidto national priorities, the Declaration statesthat, by 2010, 85% of aid flows to thegovernment sector should be reported onthe partners’ national budgets. In countrieswhere parliaments exercise real budgetarypowers, that could be a reasonable way ofstrengthening representative democracy.However, that is not always the case.

Conclusions

The Paris Declaration gives some attentionto the complementarity of official and non-governmental development efforts.Nevertheless, it focuses too strongly on anaid effectiveness agenda dominated bygovernmental national developmentstrategies and not enough on developingdemocratic ownership of developmentpolicies including the range of relevantstakeholders.

CSOs usually work with the mostmarginalised parts of societies, including thepoorest of the poor and people withdisabilities, and focus on their crucial rolein successful development policy-making.However, the Paris Declaration’scommitments in this field are weak.

There are some references to the roleof CSOs and other developmentstakeholders, including the need forparticipatory approaches and the flow ofinformation. However, the Paris Declarationfalls short of calling for specific measuresand commitments to really support theinvolvement of CSOs and the development oftheir capacity.

All in all, the Paris Declaration lacks afocus on human rights and the organisationsthat can help deliver such a focus. Forexample, gender equality is just mentionedin the context of “other cross-cuttingissues” which need further harmonisationefforts.

Given these limitations, it is unlikelythat the Paris Declaration by itself will beable to bring about the requireddevelopment effectiveness to alleviatesevere problems such as poverty, hunger,disease and under-education in developingcountries. It has taken a step in the rightdirection, but more steps are now neededto achieve the necessary rights-based focusand approach.

Notes

1 Regional Workshop on “Civil Society Challengeswith respect to Official Development AidEffectiveness”, October 29-31, 2007, Managua.

2 McGann, J. & Johnstone, M. (2006, January).International Journal of Not-for-Profit Law.


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Paris Declaration on Aid EffectivenessApplication of the Criteria for Periodic Evaluation of Global Development

Partnerships – as Defined in Millennium Development Goal 8 –From the Right to Development Perspective:The Paris Declaration on Aid Effectiveness.

Roberto BissioExecutive Director, Instituto del Tercer Mundo (Third World Institute),

and head of the International Secretariat of Social Watch, Uruguay

This is the abridged version of the originalstudy commissioned by the OHCHR toprovide input into thefourth session of the High-Level task forceon the implementation of theright to development, held from 7-15January 2008. The opinions,findings, interpretations or conclusionsexpressed in this uneditedpaper are those of the expert and do notnecessarily represent the viewsof the United Nations and do not committhe United Nations.

Introduction

The Millennium Declaration1 (MD) states that“in addition to our separate responsibilitiesto our individual societies, we have acollective responsibility to uphold theprinciples of human dignity, equality andequity at the global level.”2 It further addsthat “we are committed to making the rightto development (RtD) a reality for everyoneand to freeing the entire human race fromwant.”3 Those commitments are reflected inMDG8, entitled “Develop a GlobalPartnership for Development.”

The Paris Declaration on AidEffectiveness4 (PD) - adopted in March 2005by an intergovernmental High Level Forumconvened by the Organization for Economic

Co-operation and Development (OECD) - aimsat taking “far-reaching and monitorableactions to reform the ways we deliver andmanage aid”5. Human rights and the right todevelopment in particular are notmentioned. The PD does not even reaffirmthe MD, which emphasizes human rights andRtD in its “values and principles” and onlyrefers to the signatories “looking ahead” tothe 2005 UN five-year review of the MD andthe MDGs.

Nor can the PD be considered as fittingwithin the rubric of “global partnerships”envisaged under MDG8, because a) it is nota partnership and b) it does not deal withany of the targets of MDG8. Donors andrecipients are not treated as peers; nor dothey share rights and responsibilities.Recipient countries are penalized if they donot implement the conditionalityframework, but have no way of penalizingtheir donors/creditors. For recipientcountries, the PD creates a new level ofsupranational economic governance abovethe World Bank and the regionaldevelopment banks, which increases theasymmetry between the aid recipientcountry and their ‘harmonized’ donors andcreditors.

A Workshop on “DevelopmentEffectiveness in Practice – Applying the ParisDeclaration to Advancing Gender Equality,Environmental Sustainability and Human

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Rights”, was held in Dublin in April, 2007.6 Akey message of the workshop, whichbrought together 120 participantsrepresenting Development AssistanceCommittee (DAC) Members, partnercountries, civil society and United Nationsagencies, was that “human rights, genderequality and environmental sustainabilityare key goals of development. They arefunctionally essential to achieving theultimate goal of the Paris Declaration —increasing the impact of aid on reducingpoverty and inequality, increasing growth,building capacity and acceleratingachievement of the MDGs.”

However the questions of how thehuman rights framework, gender equality(which is also a human right) andenvironmental sustainability apply to theParis Declaration and whether the humanrights legal obligations of all states (be theydonors or “ partners”) help evolve theprinciples of the PD into contractualcommitments that could make it qualify as areal partnership for MDG8 remainunanswered.

Nor does there seem to be much scopefor explicit redirection of the PD towards arights-based approach at the High LevelForum on aid effectiveness to be held inAccra, Ghana (HLF 3) in 2008. According tothe OECD, “the primary intention of theHLF 3 is to take stock and review theprogress made in implementing the ParisDeclaration.” It has been stated severaltimes that HLF 3 is not intended to“rewrite” the PD, and therefore therewould not be an opportunity to explicitlyinclude human rights language in it. Yet,the Forum “is expected to conclude theHLF 3 with an endorsement of a ministerialstatement based on high-level discussionsand negotiation around key issues”. Thatstatement clearly provides an opportunityto explicitly reaffirm human rights and theright to development.

Operational Analysisof the Paris Declarationand Human Rights

From an RtD point of view, the fiveprinciples of the PD have differentimplications. While “ownership” and “mutualaccountability” can easily be understood asa reformulation of the concepts alreadyincluded in the RtD declaration (even ifdowngraded from “rights” to “principles”),“alignment, harmonization and managing forresults” can be supportive, neutral ordetrimental of RtD, depending on how theyare understood and implemented.

From a conceptual point of view, thepositive linkage of the PD with human rightshas been made by pointing out that theintended result of the PD is to make aidmore effective for the achievement of theMDGs and that this is equivalent to theprogressive realization of social andeconomic rights. Yet, none of the targetsrefer to those desired results; instead theyonly refer to how aid is managed anddelivered and to several preconditions thatdeveloping countries have to meet.

Thus, whether the implementation ofthe PD actually produces the intendedpositive human rights and developmentresults is out of the scope of the officialreview, monitoring and evaluation. This is amajor flaw that needs to be corrected.

Actually, many of the targets set in the ParisDeclaration, if achieved as currentlydefined, could result in substantial erosionof the right to development of “partner”countries, as the following analysis of thePD indicators shows:

Ownership

Indicator 1, defined as “partners haveoperational developmentstrategies,” including poverty reductionstrategies (PRSs) is the only indicator onownership. The target for 2010 is that “atleast 75% of partner countries” have them.


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However, “Operational DevelopmentStrategies”, as defined by the PD, do notinclude government plans, nationallegislation or any other nationally-generated“policy, legislative and other measures” asrequired by the RtD declaration in itsarticle 10, but are internationallynegotiated documents between therecipient countries and its donors andcreditors.

Furthermore, bilateral and multilateraldonors have a decisive say in theformulation of those strategies andfrequently “steer the government fromwithin.”7 Civil society and trade unions haveoften opposed the PRS precisely becauseexternal actors influence the content ofthe strategy through their financingarrangements for DBS, SWAps, etc and/orthrough their rating systems such as theWorld Bank’s Country Policy and InstitutionalAssessment (CPIA) that the indicators of thePD intensively use. There is little or no civilsociety or legislative input to themacroeconomic dimension of PRSs and datasupport the conclusion that the IMF andWorld Bank define their own means (e.g.privatization, liberalization) to PRS goals,undermining national capacity to design itsown development strategy.

If the PD really promoted partnership,then recipient countries would need tocontribute to and sign off on assistancestrategies for their countries and analysis oftheir development challenges; however theJoint Assistance Strategies are owned bydonors/creditors. Indeed, the review of theParis Declaration draws upon World Bankdata8 when they state that no governmentscores an “A” on its PRS and only 5 score a“B”.9 Due to the low grades assigned toPRSs, the OECD-DAC and World Bank do notconsider PRSs to be very operationallyuseful.

The tautological definition of ownershipused can amount to a violation of the RtDand other civil and political rights.According to a recent study from the Dutchgovernment10 “…the international financialinstitutions are limiting the scope for

devolving more control and accountabilityfor policy and aid to the government by“interfering intensively with the PRSP andwith macro and sector policies”.

Additionally, the accountability of thedonor country aid agencies to their owncitizens and taxpayers is also undermined,since a “pool” of money formed by a varietyof donor contributions is much moredifficult to follow and assess than specificprojects.

Alignment

Indicator 2, the first to assess the“alignment” principle, requires “Reliablecountry systems” and is measured by the“Number of partner countries that haveprocurement and public financialmanagement systems that either (a) adhereto broadly accepted good practices or (b)have a reform programme in place toachieve these.” This target is clearly notabout aligning ODA with the recipientcountry strategies, but about aligningcountry governance with the requirementsof donors/creditors.

The PD “Indicators of Progress” trackand score the performance of publicfinancial management systems (i.e., financialmanagement, budget execution, auditing).The performance of each government’s PFMsystem is rated by the World Bank’s CountryPolicy and Institutional Assessment (CPIA) aswell as the Public Expenditure and FinancialAssistance (PEFA) partnership. According tothe World Bank, the purpose of the CPIA isto measure a country’s policy andinstitutional development framework forpoverty reduction, sustainable growth andeffective use of development assistance.These ratings are used to allocate aid andcredit, design policy conditionality andestablish debt ceilings.

The view of many critics is that “theCPIA rates the extent to which agovernment has: a) adopted neoliberaleconomic policies (i.e., liberalization andprivatization in the context of strict budget


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discipline) and b) developed institutions,particularly those that protect propertyrights and promote a business-friendlyenvironment”.11 There is no participationwhatsoever of developing countries in thedefinition of the criteria that result inbetter grading by CPIA or in the designationof the experts in charge of assigning thegrades.

The PD Indicators also track and scorethe procurement systems of each recipientcountry. Except for the explicit goal ofeliminating corruption, no other humanright values are attached to the use ofcountry systems and none of the criteriaexplicitly require suppliers to adhere tocore labour standards.

Furthermore, the use of governmentprocurement as a tool of affirmative actionin favour of local producers or of vulnerablesectors of the population (small business,cooperatives, women or minority-run firms)to contribute to the progressive realizationof economic, social and cultural rights isexplicitly forbidden as “discriminatory”against foreign firms by the OECD“Methodology for Assessment of NationalProcurement Systems.”12 Industrializedcountries gained economic strength byusing procurement to strengthen localeconomic development, but the PDinappropriately curbs this practice.Furthermore, the opening up ofprocurement to foreign firms “applies to allprocurement undertaken using publicfunds” and “to all public bodies and sub-national governments and entities”including “the army, defence or similarexpenditures, autonomous or specializedstate owned enterprises”. This is a standardthat OECD countries do not meetthemselves; to impose these conditions ondeveloping countries is a serious violation oftheir sovereignty.

The procurement standards attachedto the PD go beyond the requests abouttransparency in procurement thatdeveloped countries demanded fromdeveloping countries in the WTO as part ofthe so-called “Singapore issues”. Those

requests were widely rejected during theCancun Ministerial in 2003 as contrary totheir right to development, because of thefear of forceful opening to foreign bidders.The PD does precisely that in the small printof the obligations that partner countrieshave to undertake as a condition to receiveaid.

Indicator 3 is the only one in the“alignment” section of the PD thatspecifically requires that “aid flows arealigned on national priorities”. Yet, this is tobe measured by the “percent of aid flowsto the government sector that is reportedon partners’ national budgets.” Whilereporting ODA inflows in national budgetscan be helpful to simplify monitoring, bothby donor/creditors and by nationalparliaments or citizens, it does notguarantee by itself that those flows, or thebudget itself, are consistent with nationalpriorities.

Indicator 4 aims to “strengthen capacity bycoordinated support” and is measured bythe percentage of donor capacity-development support provided throughcoordinated programmes consistent withpartners’ national development strategies,with a target of 50% of technical co-operation flows doing so by 2010. Thisindicator has proven particularly difficult toassess, due to the lack of a commondefinition among donors of what constitutes“technical cooperation”. It is importantthat the concept be defined properly tocurb the practice of substituting localexpertise for much more expensive foreignservices that are not attuned to localrealities.

Indicators 5a and 5b call for themeasurement of the actual use by donors ofthe recipient country’s financialmanagement and procurement systems,which should increase according to the“score” of those systems, as defined in thediscussion of Indicator 2. It is worthwhilenoting that even when a country


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procurement system achieves an “A” score,a substantial part of the donors’ aid to thepublic system may still be disbursed outsidethe recipient country system. All thecomments made for Indicator 2 apply here.

Indicator 6 is intended to “strengthencapacity by avoiding parallel implementationstructures” and the target is to reduce bytwo- thirds the stocks of parallel projectimplementation units. This is consistent withthe pressure of the PD on donors andcreditors to shift from projectized aid toprogram aid.

Indicator 7 calls for ODA to be “morepredictable”, which should be measured bythe percentage of aid disbursementsreleased according to agreed schedules inannual or multi-year frameworks. Yet thetarget for 2010 is only to “halve theproportion of aid not disbursed within thefiscal year for which it was scheduled” (anunambitious target!), with no mention oflonger term commitments.

Donors and creditors have suchunpredictable aid that, in somecircumstances, its late arrival constitutes amajor external shock to the economy of the“partner.” The unpredictability of ODA isone of the major problems limiting the useof aid to achieve the MDGs. Promoting therealization of Economic, Social and CulturalRights (ESCR) and achieving the MDGs impliesessentially more and better delivery ofpublic services (in particular health,education and water) to the poor, which inturn requires hiring teachers, doctors andnurses. However, there is ample evidencefrom the IMF’s Independent EvaluationOffice (IEO) that the IMF imposes inflationtargets and fiscal limits on governmentspending that often result in suppressinggovernments’ ability to hire key personnel.13

Moreover, because aid is so unpredictable,governments are not able to commencehiring or spending on additional wages.

These findings are supported by a studypublished by Social Watch14, which goes onto point out that: “In practice, even longer-

term commitments [than three-year budgetsupport cycles] would be necessary toassure partner governments that they havea stable source of financing for MDG-relatedrecurrent costs of social and other publicservices. Social security types ofexpenditure need to be predictable,continuous, and not subject to the ‘stop-go’ features of aid politics.”

Donors can also stop the flow of aidwhen a government fails to meet theconditions contained in the PerformanceAssessment Framework (PAF) attached tobudget support agreements. It is ironicthat the goal to make aid less volatile andmore predictable does not in any way limitor discipline the power of donors to pullthe plug from recipient governmentbudgets, just as the IMF currently does.15

Indicator 8 has as its goal the untying of aid- which depends only on donors - and themeasure is the percentage of aid that isuntied. Yet the target for 2010 onlypromises “continued progress over time”without specific figures. Its non-inclusionwith binding targets in the PD does not helpto build the credibility in the processamong “partner” countries. Together withunpredictability, the tying of ODA is one ofthe major factors in reducing aid efficiency.The percentage of tied aid over total aidcan be as high as 69% for Italy and 57% forthe United States. The Washington-basedCenter for Global Development estimatesthat “tying raises the cost of aid projects atypical 15–30%.”16

Harmonisation

Indicator 9 calls upon donors to usecommon arrangements or procedures, asmeasured by the percentage of aid providedvia programme-based approaches, e.g.,Direct Budget Support (DBS) and Sector-Wide Approaches (SWAps) or PovertyReduction Support Credits (PRSCs). DBS andSWAps are believed to reduce transactioncosts, increase efficiency in public


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spending, lead to greater predictability inaid flows and ensure greater convergenceof ODA with public funds.

The target for 2010 is that 66% of aidflows should be provided in the context ofprogramme-based approaches from abaseline of 43% in 2005. Already, theNetherlands channels approximately 70% ofits development assistance through sectoraland general budget support. DFID (UK)disburses approximately 50% of itsdevelopment assistance through budgetsupport and approximately 25% throughSWAps.

As of June 2006, the World Bankprovided approximately 40% of its newlending through budget support. In FY04-06,the Bank committed funding to 46operations using these approaches in 28countries; and in Bangladesh, Brazil, Malawi,Morocco, Nepal, Nicaragua, Philippines,Poland and Tanzania, the Bank hassupported more than one sector-wideapproach.

The sectors that move quickly toward aSWAp are health, education and water andsanitation. But, SWAps are increasinglybeing used not only for single sectors, butalso for multiple sectors and cross-cuttinginstitutional areas such as private sectordevelopment, justice, and law and order.17

The Netherlands, which has undertakenan extensive assessment of its engagementin DBS and SWAps, found that in “theeducation sector in Zambia, (...) thenumber of donor support accountsmanaged by the Ministry declined fromabout 800 in 1999 to 10 in 2004. Thenumber of donor missions in the sector perannum also declined: from about 120 toabout ten.” However, a case study onZambia18 challenges the notion thattransaction costs necessarily decline whenshifting from projectized to sector-wideapproaches.

The critique of SWAps 19 centers on thefact that they focus predominantly on the“supply-side” dimensions of service deliveryrather than the “demand side.” If donorscreate a “basket fund” for a sector that

“ring-fences” a minimum percentage of totalresources for delivery of a particular localservice, then it is essential that thespecified service be a priority of the localgovernment that receives the ear-markedresources. Policy dialogue is needed tobridge the ‘vertical’ macro-meso-micro (ornational-state-local) divide, as well asembracing ‘horizontal’ tripartite socialdialogue and an external-domestic dialoguebetween donors/creditors and domesticconstituencies.

In practice, SWAps have come to beperceived by many donors and partnergovernments not as a multi-stakeholderprocess, but as a specific publicexpenditure programme funded by (a selectgroup of) donors. The focus is on thenational government’s policy and budgetaryframework rather than on the diverse set ofactors engaged in the sector. Sectorstrategies are “highly influenced by donorpriorities. They tend to be technical,uniform documents, which lack an in-depthinsight into local (political) dynamics.Proposed solutions are often based onexperiences elsewhere, including the donorcountries’ own systems, which usually donot reflect the local dynamics at hand.”20

In Nicaragua, donors and thegovernment have not been able to agree onoverall strategies in the agricultural sector.Some European donors and the UNDP favorthe development of smallholder agriculture,whereas the government and other donors(including USAID) prefer to assist large-scaleproducers with more commercial andexport potential. Perhaps due to conflictssuch as this, some responsibilities haveshifted from line ministries to the Ministryof Finance.

A case study of Ghana by the OxfordUniversity Global Economic GovernanceProgram found that donors and consultantswere aggressive in forging a Private SectorDevelopment (PSD) strategy to which thegovernment would agree. Donors rejectedthe government’s initial procurement plansmeaning that “Ministry staff went in circlestrying to get a prioritisation that the donors


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would approve. Furthermore, transactioncosts were very high.” Ultimately, thegovernment had to use a World Banktemplate for procurement that was utterlyunsuited to the small-scale purchasingrequired by the projects. Donors arerhetorically in favor of governmentownership, but in practice, they openlydisagreed with the Government of Ghana’spriorities for funding. Also, attempts to forma PSD “pooled fund” floundered since themajority of donors were funding the privatesector directly and bypassing government.

Indicator 10 calls upon donors tocollaborate in (a) field missions and/or (b)country analytic work, including diagnosticreviews. The 2010 targets are: (a) 40% ofdonor missions to the field are joint (upfrom the 2005 baseline of 18%); and (b) 66%of country analytic work is joint (up from abaseline of 42%).

Historically, the World Bank prepares aCountry Assistance Strategy (CAS) for eachrecipient country that outlines theinstitution’s investment plan over themedium-term— e.g., 3 years. Increasingly,however, the Bank participates informulating Joint Assistance Strategies (JAS)with other donors and creditors. Thirteencountries have JASs in Africa. In the caseof Tanzania, 35 countries and multilateralorganizations of the Development PartnersGroup endorsed and/or adopted the JAS forthe country.

One danger of such harmonisation isthat, once a JAS has been approved by sucha large number of donors, after lengthynegotiations, it becomes “written in stone”making it impossible for any democraticcountry-driven process to change it,undermining the power of parliament (andeven the executive branch of government)to introduce changes if practicedemonstrates they are needed. This erodeslocal democracy and human rights.

Another danger is furtherempowerment of the World Bank relative toother donors. A concern expressed bydiplomats participating in a retreat on

Financing for Development organized by theFriedrich Ebert Stiftung in NY, October 4-5,2007, “is that the donor coordinationprocess may impede innovation by donorsand reduce the range of choice of programsby aid recipients. There is value incompetition among donors, especially withthe entry of new donors, who have notsigned on to the Paris Declaration”.21

Managing for Results

Indicator 11 aims at having “result-orientedframeworks” by “reducing the proportion ofcountries without transparent andmonitorable performance assessmentframeworks by one-third”. All DBSprogrammes and SWAps have acorresponding Performance AssessmentFramework (PAF) with policy conditions. Parliaments and citizens groups are notmeaningfully involved in the construction ofthe PAF, whose conditions are arequirement for the release of successivebudget tranches.

In 18 budget support operations alreadyin place by the World Bank (the number isrising fast), the policy conditions attachedare derived from the PAF. Since thoseconditions involve lengthy negotiations witha variety of bilateral and multilateral donors,civil society advocacy and evenparliamentary participation in decision-making becomes virtually impossible. Theelimination or modification of conditionalitywould need to be pursued not only withthe recipient government, but also withmultiple donors and creditors.

Contrary to what the title of “managingfor results” might indicate, the “results”upon which disbursements are tied are notmeasured in terms of poverty reduction orMDG achievement, but usually refer togovernance and macroeconomic policies.“Result management” will be deemedsuccessful if those policies are in place,even if poverty actually increases, whichhas frequently been the case in the pastwhen similar structural adjustment


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programmes have been implementedwithout proper social impact assessmentsand “safety nets”.

Mutual accountability

Indicator 12 is the only one on “Mutualaccountability” and is to be measured bythe “number of partner countries thatundertake mutual assessments of progressin implementing agreed commitments on aideffectiveness including those in thisDeclaration.” The target for 2010 is that allpartner countries have “mutual assessmentreviews” in place.

Since no such reviews have taken placeso far, to the author’s knowledge, it isdifficult to assess their scope and format.Yet, it is surprising that one of the keyprinciples of the PD is reduced in itsimplementation to separate exercises to beconducted at country level in the recipientcountries.

Considering the experience of theOECD DAC in conducting “peer reviews” ofdonor’s aid practices, one would expect amutual accountability exercise to beundertaken at the international level, withopportunities for developing countries tobe advised by international NGOs and otherexperts and to share experiences amongthemselves about the performance ofdonors individually or collectively.

A country-level exercise where the aidrecipient country sits in front of the wholeof its donor community implies an enormousimbalance of power and resources, wherethe developing country can be easily madeaccountable for its part in the“partnership” under threat of seeing its aidcut or reduced but where the donors canhardly be made accountable for anyeventual shortcomings. The sum of thosereviews cannot be expected to add up to afair “mutual accountability” exercise.

Further, there is neither developingcountry representation, nor that of anyinternational institution where theinterests of developing countries are

predominant, in the standard-setting andscorekeeping bodies of the PD, which areessentially the OECD and the World Bank,even when it is recipient countrygovernments, not donors, which arepenalized if those standards are not met.

Conclusions

Many of the PD’s key indicators are relatedto governance, particularly in the fields ofgovernment procurement and financialmanagement. Yet, while major changes inrecipient country governance are required,donors are not calling for symmetricalefforts among themselves by, for example,untying aid or making it more predictable.

Rather than promoting the RtD, thenew aid modalities, by aligning bilateral andmultilateral donors around certaingovernance requirements might evenundermine local democratic processes andthe “policy space” that developing countrygovernments need to make their own plans.Opportunities to promote human rights by,for example, making basic labor standards orequal opportunity employment for women acondition for participation in governmentprocurement are not only missed but evenviewed as contrary to the rules promotedby the PD.

The effectiveness of aid delivery andmanagement, as measured by the PD, doesnot assess the impact of aid on povertyreduction or realization of human rights.While it might be expected that moreefficient aid will contribute positively toboth objectives (even if not explicitlymentioned as such by the PD), the 12indicators could in fact be reviewedpositively without any measurable impact oneither.

While there is congruence and synergybetween the principles of countryownership and mutual accountability andthe RtD, the implementation and assessmentof the PD implies risks to the RtD againstwhich no insurance, complaint mechanismsor exceptions are provided.


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Notes

1 UN General Assembly A/55/L.2

2 Id., para. 2.

3 Id., para. 11.

4 Retrieved from http://www.oecd.org/dataoecd/11/41/34428351.pdf

5 Id., para 1.

6 See the documentation at hhtp://www.oecd.org/dac/effectiveness/inpractice.

7 Interview with Nancy Alexander, Director of theCitizen’s Network on Essential Services (CNES), aproject of the Tides Center, Silver Spring, MD, USA.

8 World Bank Comprehensive Development Strategies(CDFs) and Aid Effectiveness Reviews (AERs).

9 OECD. (2007). 2006 Survey on Monitoring the ParisDeclaration: Overview of the Results.p. 17.

10 The Netherlands Ministry of Foreign Affairs, “FromProject Aid towards Sector Support - An evaluationof the sector-wide approach in Dutch bilateral aid1998-2005” (IOB Evaluations, No. 301, November2006 – Policy and Operations EvaluationDepartment).

11 Alexander, N. (2004). Judge and jury: The WorldBank’s scorecard for borrowing governments. InSocial Watch report 2004. Retrieved from http://www.socialwatch.org/en/informelmpreso/pdfs/judgeand jury2004_eng.pdf

12 Based on indicators derived from an OECD-DAC/World Bank round table. Retrieved from http://www.oecd.org/dataoecd/1/36/37130136.pdf

13 IEO, IMF. (2007, March). The IMF and aid to Sub-Saharan Africa.

14 Carter, R. & Lister, S. (2007). Budget support: Asgood as the strategy it finances. In Social Watch2007, ITeM, 2007. Retrieved from http://www.socialwatch.org/en/informeImpreso/pdfs/budgetsupport2007_eng.pdf

15 Alexander, N. (2007, September). The new aidmodel: Implications for the aid system.

16 Roodman, D. ( ). An index of donorperformance. Center for Global Development.Retrieved from http://www.cgdev.org/content/publications/detail/3646

17 OECD DAC. (2007, May). 2006 survey monitoringthe Paris Declaration. Retrieved from http://www.oecd.org/dataoecd/0/45/38597363.pdf

18 Patrick, W. (2005). Transaction costs in aid: Casestudies of sector wide approaches in Zambia andSenegal. Human Development Report 2005.Occasional Paper.

19 Van Reesch, E. (2007). Bridging the macro-microgap: Micro-meso-macro linkages in the context ofsector-wide approaches.

20 Id., p.87

21 Herman, B., Schroeder, F. & Hanfstaengl. ( ).Challenges in financing for development: Policyissues for the Doha Conference. A report preparedfor the FES.

22 A/RES/60/1.

Recommendations

The RtD and human rights in general shouldbe explicitly included as goals in the PD andthe ministerial declarations of HLF 3.

An additional review and evaluationframework with corresponding targets andindicators need to be included, where theresults of the PD should be assessed interms of its impact on the RtD, HR and theMDGs.

Mutual accountability reviews should beconducted at international level (not atcountry level) with the participation ofinternational civil society organizations withdevelopment and human rights expertise.

The Development Cooperation Forum (DCF)of ECOSOC, which was created by the 2005World Summit22 and will meet for the firsttime in 2008, is an adequate, existingmechanism for mutual accountability andshould be identified as such by the PD.

Developing countries, civil societyorganizations and international organizationssuch as UNCTAD should be included in thegroups and consultations that define theimplementation criteria, targets and reviewof the PD. Suggested additions to thecriteria for implementation of the right todevelopment can be found in the full articleby Bissio.


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Barriers to Harmonization and Alignment:An African Perspective

African Forum and Network on Debt and Development (AFRODAD)

The Paris Declaration on Aid Effectivenessfor development (2005) was an internationalagreement by which donors and recipientscommitted themselves to support greateraid effectiveness. The declaration is basedon three main pillars: ownership of policiesby partner countries, which must set theirown priorities; alignment of donors withthese priorities; and harmonizationbetween donors, in order to set upcommon mechanisms, simplify theirprocedures, and share information.

This article looks at the importance ofthe Paris principles of harmonization andalignment to aid effectiveness, but alsoargues that the principles themselves willnot lead to greater developmenteffectiveness unless accompanied byprogress in democratic ownership.Harmonization and alignment must be seenas necessary, but not sufficient conditionsfor development effectiveness.

If democratic processes are not able toinform the development of policy in thefirst place, then alignment is undermined;there is no true domestic political agendafor donors to align to. Similarly,harmonization under these conditionspresents as many dangers as it doespotential benefits, since donors are notharmonizing around a strong domesticagenda, but may be using theirharmonization to exert even greaterinfluence over national policy priorities.

This dependency of the worth oralignment and harmonization on theprinciple of ownership can be seen visuallyin the aid effectiveness pyramid (see Figure2).

A top-to-bottom reading of the pyramidshows that development effectiveness firstlyneeds partner countries to decide on theaction to undertake to achieve the desiredresults in terms of development. Donors canthen align their assistance with thestrategies decided on by the recipientcountries and use the latter’s systems. Atthe base of the pyramid, donors startcomplementary actions to plan commonmodalities to simplify their procedures andto ensure the optimum sharing ofinformation.

In most cases, including in fragile Stateswhere there is usually a lack of leadershipin the country, the pyramid needs todevelop, in practice, from the bottom up.Donors may begin by improvingharmonization between themselves with theobjective of increasing their utilization of acountry’s systems, aligning themselves withits preferences, and working that way toobtain effective leadership for that country.

Harmonization and its implementation

The proliferation of development aidprogramming and provision systems

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Source: OECD and World Bank (2005): Harmonisation, Alignment, Results: ProgressReport on Aid Effectiveness, p. 18

generates unproductive transaction costsand hinders the enhancement of thecapacities of recipient countries. The ParisDeclaration principle of harmonizationmeans donors’ working together to achievegreater aid effectiveness.

Key aspects of delivering harmonizationare:

• common mechanisms for theplanning, financing anddisbursement of aid funds

• greater recourse to aid deliverybased on programs

• making best possible use of therespective comparative advantagesof donors on the sectoral ornational levels

• common mechanisms for themonitoring, assessment, andnotification to public authorities oftheir activities and other aidcontributions

• reducing the number of fieldmissions and diagnostic studies

• sharing the lessons drawn fromexperience, and creating a pool ofbest practices

One of the principal methodologies forimproving aid harmonization in Africancountries has been the development ofSector-Wide approaches (SWAps). Theseadopt common operating principles andmore coordinated procedures for funding inspecific areas such as health and education,without prescribing specific policies.

There have also been efforts by donorsto undertake joint missions to reduce theadministrative burden on recipientcountries and avoid duplication of effortsbetween donors. For example, in Senegal,the KfW and the AfDB jointly conducted thepre-evaluation mission for a projectfinanced by the WB to provide electricpower in rural areas. The FDA and the KfWhave also conducted a pre-evaluation,evaluation, and monitoring joint mission foran irrigation project in the regions of St-Louis and Matam.

Figure 2. Aid Effectiveness Pyramid


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Once more, however, despite theevidence of progress, there is still a longway to go to meet the targets set in thearea of harmonization for 2010. Whilst thetarget is for 40% of missions to be carriedout in a joined way, the reality is that only15% of missions in Senegal were jointlyconducted in 2005.

Common analyses of situations andperformance in developing countries isanother area where progress is being madetowards the Paris target of 66% of jointlyled analytical works. Typical areas of workhere include assessments of publicexpenditure management, fiduciary risk andcountry procurement.

Overview of Performancein Several African Countries

• Kenya - the shift towards the use ofSWAps and the establishment of a JointAssistance Strategy may lead tosubstantial progress toward theattainment of the 2010 targets. 45% ofaid was disbursed through program-based approaches in 2005. However,only 9% of missions and 32% of analyticworks were coordinated, shared orjointly conducted.

• Mozambique - the increased use ofbudget support and the development of

The Example of SWAps in Mozambique

External partners support SWAps in the area of health through three “basket funds”,including a general fund and two funds covering two provincial programs, as well asfor the provision of medicine. Each fund is governed by a distinct Memorandum ofUnderstanding.

The Netherlands, Denmark, Finland, Ireland, Sweden, the Canadian InternationalDevelopment Agency (CIDA), and the WB provide assistance to the SWAps of theeducation sector through a specific support fund. This assistance is based oncommon reporting and monitoring.

To support a SWAp in agriculture, external partners also practice joint financialmanagement, make common reporting, and put monitoring systems in place. Jointimplementation arrangements are formalized in a Note of Understanding which wasrenewed in 2005.

In the same vein, the Department for International Development UK (DFID), theEuropean Commission (EC), Denmark, Sweden, Norway, and Belgium provide supportto strengthen public finance management through a common fund, known as theIntegrated State Financial Administration System (SISTAFE).

Nevertheless, there is still much work to do towards the Paris target of 66% of totalaid being delivered in the form of program-based approaches. Despite the SWApinitiatives in Mozambique, only 27% of aid was provided through direct budgetsupport in 2005 and the total of program-based aid only accounted for 46% of aid tothe country.


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sector-wide approaches have been thekey drivers of improved harmonizationbetween donors in Mozambique,through the “G18” group, butharmonization outside theseinstruments remains limited.

• Zambia - the Wider Harmonization inPractice (WHIP) agreement betweendonors and the government is anexcellent starting point for workingtowards the 2010 targets. But there isno room for complacency. In particular,donors need to work harder atcoordinating their missions to thecountry: only 15% of a total of 155missions were coordinated in 2005.

• Uganda - donors need to work hard tocoordinate their activities and to makeuse of common arrangements to reduceaid fragmentation and to reduce theaid-related transaction costs incurredby the government. In 2005, only 17% ofmissions were jointly conducted, 40% ofanalytic works were coordinated,shared or jointly conducted and 50% ofaid was program based.

• Senegal - there has been a growingadoption of Program-Based Approaches(57% in 2005) and efforts towardscoordinating donor missions andanalytical work. The ongoingdevelopment of Senegal’s Action Planfor Harmonization and Aid Effectivenessshould provide a platform for donorsand the government to identify actionsto support further improvements inharmonization.

• Ghana - Harmonization is uneven acrosssectors and donors, with some majorareas of weakness. Only 20% of missionsand 40% analytic works werecoordinated, shared or jointlyconducted, with 53% of aid programbased in 2005.

The aid harmonization aspects vary inaccordance with the particular context ofeach country. The extent of harmonizationinitiatives and their forms originate fromdonor representatives in the country inresponse to the particular challenges andopportunities they face at a given time. Thisis, in fact, the very nature of theharmonization process, which is pragmaticand dependent on opportunities. However,in all the case studies dealt with in thispaper, the benefits derived fromharmonization in the provision of a moreeffective assistance are evident.

Alignment and Ownership

Harmonization must be perceived as aprogression of steps toward the alignmentof aid with national priorities and as a meansto make the country’s leadership moreeffective. Signing up to the Alignmentprinciple in the Paris Declaration commitsdonors to support national ownership of thedevelopment process by basing theirsupport on the countries’ developmentstrategies and systems.

As part of the debt relief processinvolving the heavily indebted poorcountries, the Poverty Reduction StrategyPapers (PRSPs) opened doors to variouslevels of national ownership of thestrategies. The second generation of thePRSPs has assumed increased nationalcharacter through minimal intervention ofexternal players and can be more easilyrecognized as National Plans.

As examples of these strategies, thereis Zambia’s Fifth National Development Plan(FNDP 2006-2010), the Malawi Growth andDevelopment Strategy (MGDS), the Kenyan1999–2015 National Poverty EradicationProgram, and Ghana’s Growth and PovertyReduction Strategy (GPRS II).

In developing these strategies therewas increased civil society participationproviding some level of legitimacy within theParis Declaration framework. However, thereare also cases in Africa, such as Mali, where


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the second generation PRSP has beendesigned by external northern experts withlittle or no local civil society participation1.

Beyond development policies,developing countries should also developaid policies and strategies to provide aframework for a systematic and wellcoordinated approach in soliciting,acquiring, utilizing, managing, monitoringand evaluating development assistance fromdonors. When well articulated, an aid policycould provide an appropriate aidarchitecture which would include differentproject implementation and financingmodalities and direction during dialoguebetween Government and donors andimprove aid effectiveness in the country.The aid policy should also define theprocess of reducing aid dependency and anaid exit strategy.

In Malawi, the Ministry of Finance hasspearheaded the formulation of an AidPolicy in the form of its DevelopmentAssistance Strategy (DAS), which sets outthe policies and strategies for increasingefficiency and effectiveness in themobilizations and utilization of aid so as toachieve the development objectivescontained in the Malawi Growth andDevelopment Strategy (MGDS). The draftingof the DAS was completed in October 2006.DAS has a more comprehensive set ofindicators. These are:

• Harmonization of developmentpartners project annual workplans, including monitoring andevaluation systems and theiralignment to the MGDS monitoringrequirements.

• Holding of a Joint CountryProgrammed Review (JCPR) everyyear, and linking annual sectoralreporting to the JCPR.

• Holding of annual sectoral reviewsto feed into the JCPR process.

• Percentage of missions that is jointbetween four or more developmentpartners.

• Formulation of an annualdevelopment calendar to whichdevelopment partners stick.

Furthermore, it is not enough to havenational development and aid strategies,these strategies must be truly national andhave the required legitimacy to whichdonors must align in accordance with theprinciple. Recent experiences point to theneed for a framework within whichalignment to national development and aidstrategies could meaningfully be controlled.A number of countries in Africa have nowdeveloped Joint Assistance Strategies (JAS)with donors. Jams are crucial for donorharmonization towards alignment and forthe Government and their various sectors tounderstand better the thinking of donors.

However, in some cases, the JointAssistance Strategies are underminedthrough being non-binding. This lack ofcommitments from the donors allows themto continue using their own CountryAssistance Strategies or BilateralAgreements. This has implications for bothalignment and harmonization.

The non-committal attitude to thedevelopment goals of the recipient country,as seen in the Zambian JAS is an indicator ofthe uncertainty around the destination ofthe Paris Declaration agenda. Some donorslike Japan and USAID are not really yet onboard the Paris Declaration platform despitehaving signed up to it.

Other Jams suffer from an intrinsictendency to suppress important differencesof opinion and approaches betweenGovernment and donors in the absence ofmechanisms for settling and harmonizingsuch differences, for example in Tanzania.There remains a need to strengthendialogue mechanisms in support ofalignment.

The Development of National Strategies

For the principles of alignment andharmonization to be effectively implemented


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and to achieve the desired goals, it isessential that there is effective setting ofpriorities, policies and strategies at nationallevel. Progress at harmonization has startedand needs to continue, but it will only berelevant if it is harmonization aroundnationally led development policies.Similarly, alignment risks being a box tickingexercise unless national strategies to whichdonors align themselves are genuinelynational.

So far, national systems are only juststarting to be developed. The FinancialAccountability (PEFA) program, a partnershipestablished in December 2001 involving theWorld Bank, IMF, European Commission,Strategic Partnership with Africa, andseveral bilateral donors (France, Norway,Switzerland, and the United Kingdom) is agood programmed in its own right. Pea’smandate is to support integrated,harmonized approaches to the assessmentand reform of public expenditure,procurement, and financial accountability,focusing on the use of diagnosticinstruments. The programmed should movethe dialogue of national systems forward.

Although there is some differencebetween public expenditure managementand financial accountability, the totality ofthe concept embraces all the componentsof a country’s budget process: preparationand programming; execution, accounting,control, reporting, monitoring andvaluation. It also includes the legal andorganizational framework and arrangementsfor forecasting revenues and expenditures,formulating medium-term expenditureframeworks; preparing the budget; managingcash and monitoring expenditures;performing internal control and audits;accounting and reporting (includingIntegrated Financial ManagementInformation System (IFMIS).; conductingexternal audits and ensuring oversight bythe legislature and other bodies.

Some countries in Africa are beginningto internalize these systems. Thegovernment of Tanzania, for example, ownsand leads the country’s diagnostic program

forpublic expenditure management. Thisprocess has led to providing donorconfidence for supporting the developmentof a multi-year expenditure framework.Tanzania’s new approach has also improveddonor coordination by ensuring that aid isconsistent with budget objectives andpriorities and increasingly integrated withthe budget.

Several other countries that depend onaid and have limited capacity—such asEthiopia and Uganda—have also beendeveloping similar participatory,collaborative approaches to work on publicexpenditure management. In Uganda, thegovernment and DFID have reached anunderstanding on how fiduciary risk will bemonitored over time based on fourinformation sets: one annual expendituretracking survey per sector, an annual reviewof the government’s audited accounts, theoutcomes of PER updates, and technicalassistance and dialogue built around thegovernment’s public expenditure reformprogram.

Major Barriers to Effective Implementationof the Principles

1. Aid Predictability

Being highly dependent on developmentaid, to the extent of some 40% of theGovernment budget as is the case withMozambique and Zambia, makesdeveloping countries hugely reliant onaid predictability to allow them to planeffective national policies fordevelopment.

Delays or even complete non-disbursement of committed fundsundermines the integrity of budgetplanning and implementation schedules,reducing the effectiveness of entireprojects and programmers. The risks ofnon-disbursement or untimelydisbursement are particularly acute fordirect budget support whereGovernment may have committed funds


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in good faith, based on agreedexpectations of disbursements.

Ongoing research has revealed thatdespite of the rhetoric of partnershipand commitment to the developmentagenda by most donors, aidpredictability has been a major problemfor many African countries. A study ofaid volatility and predictability2 foundthat aid flows are volatile and largelyunpredictable especially for countrieswith high aid dependency: aid is morevolatile than fiscal revenue. A 2005update concluded

that volatility and

lack of predictability have becomeworse in recent years despite aidharmonization efforts.

A survey conducted among donorsand governments in 15 Africancountries in 2003 and 2004 by theBudget Support Working Group (BSWG)of the Strategic Partnership for Africa(SPA) offered some explanations for thedelay in disbursements.

• 40 percent were due to unmetpolicy conditions,

• 29 percent due toadministrative problems on thedonor side

• 25 percent due to governmentdelay in meeting processingconditions

• 4 percent due to politicalproblems on the donor side (4percent).

For the IFIs, unmet policyconditions accounted for more than60% of the difficulties to disburse anddelays in governments meetingprocessing conditions another 25%.

Forthe European Commission and bilateraldonors, 40 percent was due toadministrative and political problems onthe donor side and 35 percent due tounmet conditionality. All povertyreduction support credits (PRSC) fromthe World Bank were disbursed ontime.

2. Aid Conditionalities and Tied Aid

Aid conditionalities impede the abilityof developing governments to plan theirdevelopment strategies effectively,through negatively impacting on thereliability of aid pledges (see above).However, more fundamentally, theyimpact on developing countries’freedom to determine their ownnational policies and strategies in thefirst place.

Quite simply, if donors areenforcing policies on developingcountries through conditionalities thenalignment becomes meaningless andharmonization will do more harm thangood. There will be no trulyindependent national policy agenda fordonors to align to and donors would beharmonizing around an enforcedstrategy, further limiting the options ofdeveloping countries.

Similarly, tied aid is an on-goingissue limiting development. A recentUnited Nations Study3 notes that donormoney that comes with strings attachedcuts the value of aid to recipientcountries by 25-40%, because it obligesthem to purchase uncompetitivelypriced imports from the richer nations.

Technical assistance in the form ofpersonnel from donor countries isanother form of tied aid which hasproved rather problematic and manyAfrican states would like to see achange in this. African Governments arenow seriously considering extendingthe SWAp idea to Technical assistance.This could start as a Basket of funds foreach sector from which governmentscould fund technical assistance drawnfrom a global competitive pool includingAfrica itself and particularly from otherSouthern countries such as Asia.


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3. Good Governance

It is also clear that good governance indeveloping countries themselves isessential to enable the development ofsuccessful national developmentstrategies and to encourage donoralignment to these.

In 2005/6, Norway dropped aid toUganda’s national budget by US $4million and Sweden by US $8 milliondue to governance issues. The lessonhere, as in the case of Kenya, is thatextent to which African governmentsare able to adhere to the promotion ofgood governance and prudentutilization of public resources willremain key in contributing to the levelof donor predictability, alignment andreliability in the delivery of aid fordevelopment.

In Tanzania however, GBSdisbursements have improvedconsiderably, which can partly beexplained by the effective and diligentmanner in which the PerformanceAssessment Framework isoperationalized. Similarly predictabilityof aid flows to Mozambique hasimproved in the context of the three-year MTEF. Mozambique has developeddatabase systems and been moreconforming to donors to secure suchpredictability.

4. Accountability

Part of the agenda of improvingrecipient country governance andreducing donor conditionalities is theimplementation of effectiveaccountability mechanisms.

Most African countries have nothad adequate public financialaccountability systems. Measures areneeded to improve the legal andorganizational framework for publicexpenditure management, systems andprocesses for expenditure programming

and budget preparation and execution,accounting and reporting.

African countries have shown weaklegal systems and these have to bestrengthened not on the basis of theneo-liberal model which restrictscapacity definition but based on theneed to eliminate the constraints, notrisks, that lie in the way of developmentaid. Priority should be given todeveloping a robust, internationallyaccepted framework for benchmarkingand measuring the performance ofpublic expenditure management

Accountability as an importantconcept to the systems has two keyelements: being answerable and havinginstitutions and systems that can metsanctions for violation of rules andregulations. Common assessment ratherthan donor assessments should beintroduced.

Accountability of donors is alsoessential, especially given the powerimbalances that enable them to exertundue influence of developingcountries’ policies and strategies.Unless donors can be held to account,they are likely to continue to pursuetheir own interests through their aidpolicies.

5. Local Capacity

A major restriction on recipientcountries’ abilities to define their owndevelopment agendas effectively is theirlack of administrative and financialmanagement capacity, principallythrough the sheer lack of humanresources. There is also a lack ofcapacity on the implementation side ofdevelopment policies, for example inprofessionals in the fields of health andeducation.

This lack of capacity requirescapacity development, rather thancapacity building. This second conceptwas the basis of much technical


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assistance; for example, if theaccountants were not doing their jobproperly, a workshop was organized forthem. However, rather than moretraining for existing workers, moreresources are needed to employ moreworkers.

The Ministry of Health in Zambianeeds in excess of 20,000 frontlinehealth workers, paid reasonable salariesto stop them moving to Europe forbetter paid work. Donor support isneeded to employ the necessarypeople, but donors too often claimthat it is government responsibility topay its staff. This thinking does notaddress the need for health workers,but is essentially a neo-liberal model onwhich so much of the developmentmachinery depends.

This lack of capacity may also beresponsible for the apparent lack ofinterest in line Ministries in issuesrelated to the Paris Declarationbecause there is not adequate criticalmass against the old project approachwhere the Line Ministries are the onesthat receive the money directly. TheMinistry of Finance has taken on animportant coordination and resourcedistribution role which it does notalways fulfill well, causing more apathyin the Line Ministries rather thanfighting for broader resourceallocation.

It is crucial here to note that theposition of donors is largely influencedby the IMF defined MTEF whichrestricts the Government wage bill to8% of GDP and therefore does not allowfor the employment of new staff in thecivil service to develop capacity. It wasthe lack of capacity argument that wasused as one of the reasons forestablishment of ParallelImplementations Units (PIUs).

6. Participation of CSOs

The participation of CSOs in formulatingnational aid and development policies ishighly significant because they are akey stakeholders both as recipients andas part of the aid architecture. Theyhave knowledge and expertise,particularly around the realities on theground of the people living inprecarious situations, which it isessential to take into account whendeveloping policies.

They have a crucial role in theabove-mentioned field of holdinggovernments and donors to account forthe policies they implement.Furthermore, there is an important rolein carrying out civic education amongthe public to demand better economicgovernance from the government toensure better use of public resources.

CSOs, labor unions, and other socialmovements are the expression of anactive democratic citizenship withoutwhich little progress can be achieved ingovernance or development. CSOstherefore are fully fledged developmentactors rooted in the organization ofcitizens to claim their rights and to callgovernments and donors to account.

While many governments recognizethe important role civil societyorganizations and the private sectorcan play, there lingers the observationthat CSOs have generally adopted ahostile approach to governmentinitiatives and this has tended todiscourage consultations. There is stillsome way to go before autonomy and‘watchdog’ functions of NGOs areembraced by all Governments anddonors. The challenge for increaseddialogue therefore still remains.


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Notes

1 See the “Paris Agenda and Efficiency in Mali:ownership and aid modalities” by IsalineBergamaschi, presented for Informal ExpertsMeeting on Ownership in Practice Paris 27-28September, 2007 as part of the OECD Global Formon Development. In fact Isaline observes that thesecond Generation PRSP (December 2006) in Maliwas seen by the Government officials as a “BlackBox” not knowing what was inside it; especiallygiven that the Unit responsible for drawing up thePlan did not have a single Macro-economist!

2 Bulio & Hamann. (2003).

3 Deen, T. ( , July 6). Development: Tied aidstrangling nations. Inter Press Services.

Conclusions

It has been seen that the principles ofharmonization, alignment and democraticownership are actually interdependent.Only if all of them are followed will aidpolicies become effective at promotingoptimum development.

However, the Paris Declaration lacksclarity and strength in defining terms andsetting concrete commitments. Forexample, it fails to exclude the use of policyconditionalities as ‘results’ to be monitoredand fails to envisage an institutionalisedmechanism for inclusive aid management,requiring the involvement of criticaldevelopment partners such as CSOs, theprivate sector and the parliament.

It seems that the Paris Declaration,although very important and with

foreseeable positive impact, could be onemore process that will keep everyone busywithout focusing on the true reasons whyaid is ineffective. The Declaration deals withthe symptoms of aid ineffectiveness, not itscauses. Therefore, apart from advocatingfor the implementation of the ParisDeclaration, CSOs call for the aideffectiveness agenda to go beyond the Pariscommitments. This must address the rootcauses of aid ineffectiveness and devise newdevelopment strategies to break the cycleof poverty, aid dependency and under-development. These issues will requireattention for the realization of theaspirations of the alignment andharmonization principles of the ParisDeclaration.


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Chapter 3 The Paris Declaration Does Not Go Far Enough