Commonwealth Local Government Forum

Freeport, Bahamas, May 13, 2009

Tim Kehoe

Local Government and Aid Effectiveness

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Objectives

Set out the policy context for this discussion Recent developments – assessing progress and

enriching the aid effectiveness debate Outline some of the challenges of Aid

Effectiveness for Local Governments Discuss the role of local government in promoting

and ensuring aid effectiveness Recommendations

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Policy Context– Emerging Consensus on Aid Effectiveness

Paris Declaration (2005): Consensus among 100 donors and countries on measures to enhance the delivery and management of development assistance; a road map with performance indicators

Based on five principles:• Ownership: Country leadership in setting priorities, coordinating

development of plans• Alignment: Ensuring donors align with national plans, use local

systems and institutions• Harmonization: Strengthen donor coordination and standardization

of administrative procedures• Managing for Results: Development of performance assessment

frameworks • Mutual Accountability: Share the burden of accountability and

transparency

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Source: OECD 2006

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What does this all mean?

AE is dominating the development discourse: it shapes the way donors define priority sectors, focus countries, and mechanisms for aid delivery

Restructuring the way resources are allocated: adoption of new funding modalities: Program Based Approaches (PBAs), Sector Wide Approaches (SWAp), General Budgetary Support (GBS)

Focus on the how (mechanics of aid delivery) more than the what (development effectiveness of aid)

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Current Context – mid-term assessment and enriching the AE debate 2008 – mid-point review of the Paris Declaration: Donors,

recipient governments and other development practitioners undertook assessment of whether PD has had the desired effect of fostering more effective and accountable development

High Level Forum 3 in Accra (September 2-4, 2008) Paris has fallen short of its objectives due to (1) over-

emphasis on aid mechanics rather than development impact and (2) the absence of key development stakeholders (CS, LG) in the policy discussions

Need to enrich the AE agenda: involve civil society, local authorities, parliamentarians

Local government initiated systematic policy reflection on the relevance, impact, and opportunities of aid effectiveness on local government

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Recent Developments – Local Government and the Aid Effectiveness Global Forum on Civil Society and AE (Feb/08) UN Development Cooperation Forum (NY, July, 2008) Accra High-Level Forum: Accra Agenda for Action

September 2008:

i) Recognition of LG as development actor

ii) LGs to participate in preparation, implementation, monitoring and evaluation of national development plans

iii) Capacity building of LG CLGF Conference on Access to Development Funding

for Local Government (Johannesburg, September 2008) Public Policy Forum on LG and AE (Barcelona, Jan/09) UCLG position paper on AE and Local Government

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Challenges of Aid Effectiveness for Local Government

Recognition: Getting local governments recognized as valued partner in helping to implement the Paris Declaration

Participation in national development planning: Lack of involvement of local governments in setting national development plans and priorities

Funding: More funds being channeled through central governments, less going directly to local authorities

Marginalization: Risk of marginalizing the legitimate role that local governments play in development

Alignment: Ensuring that decentralized cooperation is aligned with existing development planning frameworks

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Principles of Aid Effectiveness – a local government perspective Ownership: development strategies require ownership by sub-

national levels of government Alignment: development cooperation and national development

strategies must align with decentralization frameworks and strengthen local autonomy

Harmonization: LGs should take the lead in harmonization of development cooperation in communities; better coordination of development cooperation partner interventions

Managing for results: the need for harmonized, results-oriented reporting and monitoring frameworks at local level; common set of result indicators to measure effectiveness of decentralized cooperation

Mutual accountability: northern and southern LGs should co-manage programs, holding each other mutually accountable for results; developing a code of ethics to guide cooperation

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Recommendations – Local Governments and Associations

Build a strong and unified voice on LG and aid effectiveness through national, regional and global organizations (UCLG, CLGF)

Engage in dialogue and advocacy with donors and central governments: OECD, UN/DCF, World Bank…

Promote participatory processes and make decentralized cooperation more beneficiary demand-driven, aid effective

Ensure municipal international cooperation (MIC) and association capacity building (ACB) is well-coordinated and take into account local partner agendas

Develop a community of practice for sharing knowledge, tools and lessons learned in MIC and ACB

Promote long-term partnerships between LGs and partner countries, international organizations, donors, civil society, parliamentarians, etc.

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Recommendations – Strengthening the relationship between national and local authorities Make governance a cross-cutting theme for central

governments and donors – i.e. greater consideration in policy & program development.

Establish formal mechanisms to strengthen consultation and coordination between local and national governments and donors for policy formulation and planning, implementation, monitoring and evaluation of national development strategies

Enhance coordination between local and national planning processes

Ensure development funds (i.e. budget support) flow to local governments through existing fiscal transfer mechanisms

Improve the transparency/accountability of aid management: strengthen the capacity of local authorities to monitor the delivery and effectiveness of aid (transparency); reinforce mutual accountability and shared responsibility for development

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Recommendations – Consolidating the Donor/LG Relationship

Recognition of LG as development actors Creating space for regular consultations and multi-stakeholder

dialogue on national development strategies and policy dialogue with OECD, UN Development Cooperation Forum, World Bank

Donor funding for policy development and programs that promote political, fiscal and administrative decentralization

Mechanisms for direct local government management of programs on LG capacity building, promoting democracy and supporting decentralization

Research on impact of budget support and pooled funding are having on local development actors (i.e. LG, civil society)

Offer a balance of aid delivery mechanisms