New directions in the quality of aid debate: Implications for support to Public Financial Management May 2011

8/6/2019 New directions in the quality of aid debate: Implications for support to Public Financial Management May 2011

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New directions in the quality of aiddebate:

Implications for support toPublic Financial Management

Stephen P. Groff

Deputy DirectorDevelopment Co-operation Directorate


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Outline

I. The Aid Quality Agenda andCommitments

II. Assessing Progress

III. Paris Declaration Commitments on PFMIV. New Actors and New Themes

V. High Level Forum on Aid Effectiveness:

Implications for the future Aid QualityAgenda


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Change .? Why Change?

Its about making aid work better where it is needed

3


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A Day in the Life of

Source Don De Savi n & COHRED


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Cc e p

C o m m o d i t y

T y p e( c o l o u r c o d e d )

C o m m o d i t

Ministry of Health: Kenya


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The Aid QualityJourney

RomeDeclaration

onHarmonisat

ion

Accra ActionAgenda

Busan29 Nov

1Dec 2011

2002

Monterrey

Consensus

2003 2005 2008 2010 2011

HLF-1

HLF-2

Paris

Declarationon Aid

Effectiveness

BogotaDeclaration on

SSC

DiliDeclaration onFragile States

Istanbulprinciples on CSO

effectivenessHLF-3

HLF-4


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The Paris Declarationpyramid


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Paris Declaration: what makes itdifferent?

Unprecedented consensus;

56 action-oriented commitmentsfor both Donors and Partnerscountries;

Built-in mechanism formonitoring progress at countryand global levels (12 Indicators);

and

Targets set for 2010 monitoredin 3 separate surveys (2005-

2011).


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Outline






k


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1 Operational DStrategies

2

Reliable Public

Management

Progress on track2005-2008

36%

59%

88%


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Targets requiring effortsbut within reach (2005-2008))

1 OperationalStrategies

2

Reliable Publi

Mana ement

49%

1483

45%

36%

59%

88%


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very special efforts (2005-

2008))


2

Reliable Public

Mana ement

9%

22% (No progress)

49%

1483

45%

36%

59%

88%

43%

42%

42% (slippage)

20%

44%

22%


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Outline



III.Paris Declaration Commitments onPFM: Key Messages

IV. New Actors and New Themes

V. High Level Forum on Aid Effectiveness:Implications for the future Aid QualityAgenda


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Total donor PFM support, 1995-2008


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Paris Declaration and PFM

DONORS committed to:

Provide reliable commitments of aid over a multi-year framework

Disburse aid in a timely and predictable way

Rely on transparent partner government budget and accounting mechanisms

Adopt harmonised performance assessment frameworks

PARTNER COUNTRIES committed to:

Publish timely, transparent and reliable reporting on budget execution

Ensure that national systems are effective, accountable, and transparent

Take leadership of the public financial management reform process

Mobilise domestic resources, strengthen fiscal sustainability

Create an enabling environment for public and private investments


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Evidence on PFM: Mixed


2Reliable Public

49%

1483

45%

36%

59%

88%

45%

43%

47%

21%

44%

9%

26%

24%

ACCRA AGENDA FOR ACTION


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ACCRA AGENDA FOR ACTION:Commitments on PFM (2008)

DONORS will:

Use country systems [including PFM systems] as the first option in the publicsector.

Be transparent when they dont use them.

Support country-led reform programmes.

Develop corporate plans for using country systems.

Channel 50% (or more) of government-to-government aid through countryfiduciary systems (i.e. PFM + Procurement)

PARTNERS will:

- lead in defining reform programmes.

- Strengthen their budget planning processes

- Facilitate parliamentary oversight including through more transparency in PFM

PARTNERS & DONORS willjointly assess quality of country systems.

Wh t th diff t


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What are the differentcomponents of the

PFM system that aid can use?

Source: Mokoro (2010)


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Implementation

Many factors lead to donors bypassing country PFMsystems

Varying perceptions of risk

Emphasis on fiduciary risk

Developmental risk of not using country systems

Incentives and capacities in donor organisations

Political constraints: visibility, traceability...

Quality ofpartner country systems

Shifting transaction costs from partnergovernment to donor


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Some common myths

Using country systems means providing budgetsupport

Not necessarily: all aid modalities can make use ofcountry systems

An all or nothing approach?

Different components of country systems can be used

Pooled funds are a move towards use of nationalsystems

They might be, but need to be careful about secondbest solutions

Technical co-operation cannot make use ofcountry systems

Need a flexible approach


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Working Party on Aid Effectivenesssupport on PFM

Assessing progress (Quality and Use of PFM Systems)

Global Partnership on Country Systems

Dedicated Task Forces on PFM and Procurement

Identifying and disseminating good practice

Developing and supporting common tools (e.g. procurementassessment)

Country Level Work

Lending political support, monitoring, sharing experiences


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Outline



III. Paris Declaration Commitments on PFMIV.New Actors and New Themes




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Broadening the Partnership Shaping the global development architecture i.e. G20

Development Consensus

G20 discourse (June 2010) on the need for greater transparency,accountability and institutional governance including use of countrysystems

Development actors beyond the DAC:

Non-traditional providers of development assistance (i.e. MiddleIncome Countries, Emerging Economies, Arab donors etc)

Civil society organisations

For-profit private sector and foundations

Bridging the divide: DAC Statement on New Partnerships, BogotaStatement on South South Cooperation


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Objectives of Broadening thePartnership

Finding convergence and common ground

Share lessons on economic growth, povertyreduction and development co-operation

Mutual interest in achieving results while

respecting diverse ways to reach them Interest in improving all forms of co-operation

through inclusive dialogue, mutual learning andknowledge-sharing

Recall the enduring relevance of the Parisprinciples for developing countries (fragile states,MICs, LDCs)


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New Themes Climate Change Financing

Cancun pledges = USD 30 billion in Fast Start Finance(FSF) over 2010-2012 with an additional long-term goalof raising USD 100 billion per year by 2020 from publicand private sources

Public Private Partnerships

Stronger regulatory environments

Innovative Financing Mechanisms

Aid as Catalyst towards more Effective States


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Outline




V. High Level Forum on Aid

Effectiveness: Implications for thefuture Aid Quality Agenda


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Where are we now?

MonterreyConsensus (2002)

Rome HLFon

Harmonisation (2003)

Accra Agenda

for Action(2008)

Bogota

Statement onSSC

(2010)

ParisDeclaration on Aid

Effectiveness (2005)

DiliDeclarationon fragile

states (2010)Korea

HLF (29

Nov. 1Dec.2011)

27

g eve orum on


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g eve orum onEffectiveness: A Unique

OpportunityForging a new consensus on aid and development? Chance to reinvigorate the global commitment towards the MDGs;

Refresh and reaffirm Paris / Accra principles;

Recognise the role of aid as contributor and catalyst fordevelopment results and effectiveness;

Improve the quality of partnerships through embracing partnercountry leadership, diversity and mutual respect;

Seek convergence based on complementary strengths anddifferentiated responsibilities.


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Who? Where? When?

A political eventthat attracts ministerialattendance, with decisive outcomes

Busan, Korea. Host: Government ofKorea

29 November to 1 December 2011.


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HLF-4- Main Objectives Stocktaking from the Paris / Accra process

Agreeing on features ofhigh quality aid and itsmonitoring frameworktowards 2015

Situating aid in its broader development context:

More actors, development finance effectiveness

Diversified approach: MICs, LICs, FS, regions

Catalyst dimension: trade, security, climate

Results and right-based approaches

i f li i l


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Emerging Areas for PoliticalOutcomes

Results and transparency for better accountability

Ownership and Leadership

Effective States and Alignment (Country Systems)

Diversity at country level fragile states, middle

income countries, LDCs Climate Change Financing

Recognise all forms of partnerships (SSC, PPPs)

Role of CSOs, Parliaments and local government


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Key milestones in 2011Working Party on AidEffectiveness

Meetings and KeyEvents

HLF4 Evidence Country Systems

Q1

Q2

Q3

Q4

4th High Level Forum on Aid Effectiveness

29 November 1st December, Busan, Korea

1st draft outcomedocument

MonitoringSurvey:country leveldata collectionEvidence forProgress SinceParisDeadlines: 31

March

Evaluation:

Synthesis report(April 2011)MonitoringSurvey:preliminaryresults 1st draftProgress sinceParis (July 2011)

Reportfinalisation(September2011)

Themes forBusanDeadline: January

Preliminary Menuof Options

WP-EFF EXCOM (9-10 March)

WP-EFF + ExCOM(7-9 July)

WP-EFF + ExCOM(5-7 Oct)

2nd draft outcomedocument

DAC SLM (6-7April)

WB/IMF SpringMeeting (16-17April)

WP-EFF co-chairsFirst NarrativeOutline forOutcomeDocument(comments by 3April)

GlobalPartnershipon CountrySystems (9-10

June)

Task Force onProcurement(May)

Task Force onPFM (6-7 June)

TBC: Meetingon EffectiveStates (Paris,October)


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www.oecd.org/dac/effectivene
http://www.busanhlf4.org/http://www.busanhlf4.org/

Documents

New directions in the quality of aid debate: Implications for support to Public Financial Management May 2011