Multilateral Mechanisms for Managing International Development Assistance. The Challenge of Effectiveness and Reform Yuriy Zaytsev National Research University - Higher School of Economics Moscow, Russian Federation

Why Multilaterals? Multilateral versus bilateral mechanisms Pros: – Economy of scale; – Political neutrality; – Legitimacy; – Country programmable aid; –Flexible delivery mechanisms. Cons: Institutional complexity; Insufficient data and indicators on multilaterals’ effectiveness. The capacity to mobilize and concentrate greater aid volumes; Country programmable aid principle implementation; Capacity to address the crisis situations.

The Scope of Multilateral Institutions Three types of multilaterals: – IFIs; – UN agencies; – Global and regional bodies. 33 per cent of the gross ODA (~USD129 billion); Prevalence in Sub-Sahara Africa, South and Central Asia; Provide less unspecified assistance; Preferred mechanisms by Brazil, China, India; Additional sources of financial flows.

ODA, provided by DAC countries to multilaterals Source: OECD Creditor Reporting System

Contribution of DAC members into multilateral organisations ( ) Source: OECD DAC Report on Multilateral Aid, 2010

Key Forms of Managing Development Assistance 1)Cooperation with international institutions; 2)Cooperation with sovereign donors; 3)Trilateral cooperation: emerging donor and traditional donor; 4)Trilateral cooperation: emerging donor and international institution. -Social and economic regional development: -Health; -Education; -Infrastructure Integration of partner countries into the processes of global economy: Aid for Trade; Investments; Value added chains project support budget support sector wide approaches

Need for post-crisis reform Coordinated Inter-institutional Mechanism: UN bodies, World Bank, (?) International Aid Office (?) International Development Aid Fund (?) UN Sustainable Development Board UN Funding Mechanism reach countries’ contribution formula list of eligible countries OECD DAC Donors’ club

Factors of Aid Effectiveness Coordination of multilateral and bilateral donors; Transparency and accountability in financing aid programmes; Decreasing the number of duplicating programmes at country and sector level; Decreasing the fragmentation of provided resources; Refusing the practices of aid conditionality; Strengthening governmental control over aid financial management; Public procurement; Country programmable aid Contribute to donors’ effectiveness assessment, but do not assess the impact of aid for developing countries Lack of skills and capacities for managing aid programmes; Insufficient infrastructure; Lack of capital and investments; Market failures; Protectionism and trade barriers; Weakness of national institutions. Barriers of Aid Effectiveness Challenges of Aid Effectiveness

Managing for development results good governance country ownership harmonization alignment of donor efforts measurable results accountability for development results Mobilizing international efforts to comply with commitments; Increasing efficiency of programs implementation at the local level

Do partner countries have managing for results frameworks? Country Country Afghanistanno dataDLiberiaDD AlbaniaDDMadagaskarCC BangladeshDCMalawiDD BeninCCMaliDD BoliviaССMauritaniaCC Burkina FasoССMoldovaDC BurundiDDMongoliaDD CambogiaCCMoroccono data CamerunDDMozambiqueCB Cabo VerdeDCNepalCC CARDDNikaraguaCC ChadDDNigerDD Columbiano data Nigeriano dataC DRKDDPapua New Guineano data Cote D'IvoireDEPeruno data Dominican Republicno data Phillipinesno data Egyptno data RwandaCC EphiopiaCCSinegalCC Gabonno data Siera LioneDD GhanaCCSudanDD HaitiDDTansaniaBB HondurasCCTogono data Indonesiano data Tongano data Iordaniano data Ukraineno data KeniaCCUgandaBB Kosovono data VietnamCC KyrgyzstanCCYemenDC LaosDCZambiaDD Notes: A – supported practice; B – advanced practice; C- the measures are undertaken; D – some elements of the system exist; E – insufficient measures are undertaken Source: World Bank, Results-Based National Development Strategies: Assessment and Challenges Ahead, Washington, DC: World Bank, December 2007.

The way Forward to Implement Managing for Development Results Strategy Strengthening national ownership; Shifting the emphasis form outputs to outcomes; Global Partnership on Managing for Development Results; There is no ready solution to establish Managing for Development Results Framework

The way to achieve the progress Short-term recommendations: – Increasing the flexibility and adaptation to the needs of partner countries; – Reconsidering key mechanisms for financing and replenishing funds of international institutions. Long-term recommendations: – General system for assessing the efficiency of the aid projects delivery; – Strengthening the competition among donors through system of different MfDR frameworks; – Decreasing the influence of bilateral donors on partner countries; – Shifting from sector and region division of labour approach to competition approach

Thank you for attention!