RECOMMENDATIONS FOR THE BUDGET IDENTIFIER IATI TAG workshop Session 15 May 2012

What do we know about aid information at the country level? Overall, poorly available More so for low income countries, with higher aid dependency and less robust systems Correlation between improvement in PFM capacity and quality of aid information on budget Case study evidence that willingness of donors to provide information is dependent on strength of country institutions to collect information and credibility of country budget systems Countries that most need aid information have poor access to it Even in countries that have effective aid information collection systems Information on off-budget projects and programes is less comprehensive Information on actual less available than on projections

Of these: provision of estimates and reports (PEFA D2 (i) and (ii)) Donor financed and government-managed projects on budget (PEFA PI 7 (ii))

The Budget Identifier But Does IATI need a Budget Identifier and what are the options for it? What value would it add over an IATI feed without it? What is likelihood of quality information under different options? What are risks, costs and benefits? KEY FINDING on COMMON CODE Compatible with country budgets: but would require further work Aggregate Disaggregate and Manually assign But will be useful signifier of budget placement of aid activities and will contribute to use of IATI data at country level.

Option 1: Leave standard as is CRS Code + Participating Organisations Segment provides enough information for countries to map But CRS provides good information for some sectors, not other Participating Organisation segment could provide information required but Will it be used, and if used, what will quality be (requires detailed information of country)? Will it always provide information? On balance more likely that a common code – with which donor staff can grow familiar – will provide good information. BUT…

Option 2: Tweak the Participating Organisation Will solve issue with countries where signatory of financing agreement is not institution against whose budget funds are used. But not data provision and data quality issue.

Option 3: Include the common code Impact will differ across countries, Most for countries without AIMS and effective data collection systems But even for AIMS effective countries will contribute to data quality Cost neutral for donors Time and resource intensity of country level processes Vs coding Common Code into donor management information systems/ programming processes BUT…. For countries with an AIMS current IATI feed can be used to get comprehensive list of projects, with country-level follow-up to identify relevant country institutions and sub-sectors for mapping 65% of LICs and 29% of MICs have AIMS, but case study data shows link between AIMS effectiveness and PFM quality, how many are effective collectors of information? Common code could contribute effectively to their transformation to this role.

Option 4: Introduce an economic classification Case studies confirmed need for economic classification Country level? But then only for on-budget projects, and crucially needed for off-budget projects Minimum level: identify proportion that is capital spending But, will not be cost-neutral: information not provided at country level so additional resources required But, positive development impact

Option 5: Include both common code and economic classification Highest impact at country level Could improve quality if IATI data Cost-neutral for budget identifier, but not economic classification Country level collection of information is not alternative for international level provision. Without international data Country level will remain incomplete and less reliable Onerous, more time intensive and expensive Countries unlikely to succeed without budget improvements; budget improvements unlikely without better aid data With international level data Country level activities can switch from primary collection to verification and analysis But only if awareness of IATI raised at country level and completeness and quality of IATI dataset can compete with country level data

Option 6: Drop Accountable Institution field and include Code and/or Economic More likely to produce good quality data Loss would be greater certainty only where data for Accountable Institution available and accurate Add to country level tweaking Also an option 7: Adjust CRS and add economic Preference of team (judgement of best balance of development impact and cost) 1 st Preferred Option: Both Common Code and Economic Classification (Option 5 and 7) 2 nd Preferred Option: Both Common Code and Economic Classification, drop Accountable Institution (Option 6) 3 rd Preferred Option: Economic Classification with Accountable Institution (Option 4) 4 th Preferred Option: Common Code with Accountable Institution (Option 3) 5 th Preferred Option: Tweak Accountable Institution (Option 2) 6 th Preferred Option: Leave Standard as is (Option 1)

OPTIONS SUMMARY 1: Keep IATI Standard as is, drop the Budget Identifier 2: Tweak the accountable institution 3: Include common code 4: Add economic classification 5: Add common code and economic classification 6: Drop accountable institution, add common code and economic classification 7: Adjust CRS coding in sectors that are needed, ensuring compatibility with base CRS to align with historic data…and add economic classification.