AID EFFECTIVENESS: Implications for Emerging Donors Presentation by George Carner Vice Chair and U.S. Representative to the OECDs Development Assistance Committee

OUTLINE The Paris Commitments Plans for Monitoring Progress Early Baseline Survey Observations Dilemmas for Emerging Donors Some Tips A Golden Opportunity

What makes aid ineffective Donors develop own plans and programs. Dispersed effort, suboptimal use of resources Countries cannot handle these demands. Result: sub-optimal impact. Limited country leadership and capacity to plan and implement programs Too little coordination among donors Too many projects with different procedures.

PARIS DECLARATION THE PARIS DECLARATION

Concerted action at the country level: –Translating Paris Declaration into local action plans. –Greater coherence among donors and between donors and partner countries around shared objectives. –More mature partnership based on mutual accountability. More ownership by recipients: –Greater ability to plan and prioritize aid. = better PRS –More transparent and accountable aid governance practices that meet acceptable standards. = strengthened PFM & Procurement Systems –More direction to aid funded development programmes. MUTUAL COMMITMENT TO:

Alignment of aid with country priorities -- Support PRS implementation, Sector strategies Harmonized approaches, lessen burden on recipients through: –More coordinated implementation arrangements. –Less duplicative donor missions, reports… –More reliance on strengthened country systems. –Complementary use of various aid modalities –Transparency on aid delivery (commitments, disbursements…) –Simpler procedures Shared Results: –Use of common results frameworks and reporting to measure impact of plans and programs. –Mutual review of progress.

PLANS FOR MONITORING PROGRESS 56 monitorable commitments: –Assessed at country level (CGs, RTs etc.) and… –Monitored internationally. 12 Indicators of Progress with measurable targets: –Measure progress of donors and partners. Based on collective action, building on local processes. DACs WP-EFF coordinating the international partnership: –Designed methodology & provided technical guidance. –Aggregating country data and drafting progress reports. Aim: To encourage and track improvements and behaviour change

2006 Baseline Survey and Report (A summary baseline report will be submitted to the DAC SLM and the final report will be ready by March 07 for HLM and other fora) Progress Survey and Report (as input for HLF3 in Ghana in 2008) 2010 Final Survey and Report ( supplemented by cross- country evaluation, peer reviews, global monitoring). MONITORING STAGES

Framework of Indicators IndicatorsSurveyDesk review 1Ownership – Operational PRSWB CDF/AER 2aQuality of PFM systemsWB CPIA 2bQuality Procurement systemsJV-Proc. 3Aid reported on budget 4Coordinated capacity dev. 5aUse of country PFM systems 5bUse of country procurement system 6Parallel PIUs 7In-year predictability 8Untied aidOECD DAC 9Use of programme-based approaches 10Joint missions & country analytic work 11Sound performance assessment frameworkWB CDF/AER 12Reviews of mutual accountability

EARLY SURVEY OBSERVATIONS Progress on 05 data collection so far, so good. Forty countries participating, 30 have submitted data. High donor participation covering about 80% of ODA. Managing the survey has been very demanding. Useful in opening a dialogue. Improving understanding of status of aid effectiveness indicators in country and what needs to improve. Baselines show starting from a limited base but progress apparent in many countries.

DILEMMAS FOR EMERGING DONORS Choice of aid modalities (projects vs. programs ) Showing the flag vs. joining others Assuring accountability vs. using country systems Tying vs. Untying of procurement Attending to implementation vs. local donor coordination Signing onto PD implementation plans Managing for results

TIPS: Aid modalities Pay attention to partner priorities and local capacity building needs when designing programs Consider using program-based approaches: --For example, favor aligned projects with sector programs over free standing projects --Try some sector budget support. In deciding on implementation modalities, look to maximize complementarity with other donor programs.

TIPS: Using country systems Use country institutions, systems, procedures for implementation, financial management, procurement, accounting, and audit, to the extent possible. Or if not reliable, use existing donor systems (e.g. WB procurement procedures) rather than creating own systems. Join others in strengthening local capacities/systems Look to favor local sourcing, procurement and spending through use of local contracts and grants; engaging host country experts, NGOs and firms, and purchasing more goods locally.

Explore delegated cooperation opportunities. Participate in implementing local aid effectiveness action plans and monitoring processes or delegate to other donor. Join other donors in endorsing local compacts, MOUs, agreements, to greatest extent possible. TIPS: Local Donor Coordination

TIPS: Managing for Results Build results into your programs at the outset. Join other donors in helping strengthen partner results monitoring and reporting systems rather than setting up your own, which are costly and staff intensive. Rely on others data collection and reporting systems.

A GOLDEN OPPORTUNITY As Emerging donors you do not need to retrace the footsteps of longer standing donors. You have the chance to set up your development cooperation systems on a 21 st Century model In spirit of Paris Declaration, adopt best practices to achieve greater aid effectiveness & development impact.