1. UNDP RBA MDG-Based National Development Planning Workshop Conducting an MDG Needs Assessments: Technical Issues Chandrika Bahadur, UN Millennium Project Abdoulie Sireh-Jallow, UNDP Zambia February 27- March 3, 2006

2. 2 www.unmillenniumproject.org Agenda  Objectives of MDG based needs assessments  Overview of different costing methodologies  The MDG needs assessment approach: a practical illustration from the education sector  Implementing a needs assessment process

3. 3 www.unmillenniumproject.org Motivation The Needs Assessment Exercise aims to flip the question: FROM : How close can we get to the MDGs under the current constraints? TO : What will it take to achieve the MDGs?

4. 4 www.unmillenniumproject.org Principles of development strategies that are MDG based Typical strategy todayMDG-based development strategy 1990 2005 2008 2015 MDG MDG Base Year Target Deadline YEAR ? 1990 2005 2008 2015 MDG MDG Base Year Target Deadline MDG target Level of MDG progress

5. 5 www.unmillenniumproject.org Objectives of Needs Assessment  Answer the question: “What would it take to achieve the MDGs?”  Translate the MDGs into operational targets  “Localize” the MDGs  Develop a strategy for increasing “absorptive capacity”  Strengthen coherence between planning and budget processes and guide programming of expenditures  NOT limited to MDGs; can be used as a framework for assessing needs of other relevant sectors for the country  Provide a monitoring and accountability framework  Support the national policy dialogue and negotiations with development partners

6. 6 www.unmillenniumproject.org Approach to aligning national development strategies with the MDGs Needs assessment through 2015 Long-term plan aligned with the MDGs MDG-based development strategy  Identify combination of scaled up inputs needed to meet MDGs  “What” & “How Much”  Identify combination of policies and programs to meet needs  “How To”  Short-term 3-5 year strategy to launch 10-year strategy, including:  MTEF  Macro framework  “What needs to be done right now?”

7. 7 www.unmillenniumproject.org What is an MDG Needs Assessment?  Who and where are the poor? –Identifying the population in need, based on existing analyses  What needs to be done? –Based on current programs and sector strategies –Needs assessment from now until 2015 –Goods, services, infrastructure  How much will it cost and what are the human resource implications? –Local unit costs x population in need –Human resources required to meet each MDG

8. 8 www.unmillenniumproject.org MDG Needs Assessment Approach 1.Identify interventions 2.Specify targets for each intervention 3.Estimate resource needs 4.Check results

9. 9 www.unmillenniumproject.org Suggested Investment Clusters 1.Rural development 2.Urban development 3.Health systems, including HIV/AIDS 4.Education 5.Gender equality 6.Environment 7.Science, technology and innovation 8.Cross-national infrastructure 9.Public sector management

10. 10 www.unmillenniumproject.org Agenda  Objectives of MDG based needs assessments  Overview of different costing methodologies  The MDG needs assessment approach: a practical illustration from the education sector  Implementing a needs assessment process

11. 11 www.unmillenniumproject.org Comparing Costing Methodologies Method & QuestionLimitations Costings based on ICOR Asks: “What is the aggregate level of investment needed to meet the poverty goal?”  Provide little guidance to programming expenditures  ICOR and poverty-growth elasticities cannot predict growth and poverty rates  Don’t project required changes in the composition of investments ·  Ignore MDG interventions that do not have a direct impact on growth  Historical ICORs and poverty elasticities apply only to marginal changes  Cannot estimate human resource and infrastructure requirements  Cannot avoid double-counting of interventions across sectors  Lump together public and private investments

12. 12 www.unmillenniumproject.org Comparing Costing Methodologies Costings based on aggregate input- outcome elasticities Asks: “What is the aggregate level of investment required to meet individual Goals?”  Can only model a small number of aggregate variables across few sectors  Historical elasticities apply only to marginal changes  May ignore the impact of interventions outside of the sector (e.g., impact of water and sanitation on health outcomes)  Provide little guidance to programming expenditures and cannot calculate human resource & infrastructure gaps  Cannot avoid double-counting of interventions across sectors  The nature of production functions, elasticities of substitution, and number of parameters are partly dictated by the need to maintain a system of equations that can be solved rather than the actual dynamics of each intervention area  Mathematical complexity makes models difficult to understand for non-experts

13. 13 www.unmillenniumproject.org Comparing Costing Methodologies Costings based on aggregate unit costs Asks: “What is the gap between current expenditures and those required to achieve each Goal?”  Unit costs based on current or historic expenditures,which may be a poor guide to future expenditures  Little guidance to programming expenditures  No information on human resource and infrastructure requirements for MDGs  No differentiation between capital and operating costs  Address only a subset of interventions within a sector  No cross-sectoral dynamics Intervention-based needs assessments Asks: “Which interventions are needed across sectors to achieve the Goals, and what are their associated costs?”  Cross-sectoral dynamics cannot be modeled dynamically, but require iterative adjustment of coverage targets  It is time intensive to develop detailed investment models  Requires links to macroeconomic dynamics that need to be modeled with the help of separate tools

14. 14 www.unmillenniumproject.org Agenda  Objectives of MDG based needs assessments  Overview of different costing methodologies  The MDG needs assessment approach: a practical illustration from the education sector  Implementing a needs assessment process

15. 15 www.unmillenniumproject.org MDG needs assessment approach

16. 16 www.unmillenniumproject.org Education Needs Assessment Approach (1) Country demographic data Capital and recurrent costs per student TOTAL COSTS Students reached by interventions Target coverage rates for : Primary Education Secondary Education Adult Literacy Cost components for key interventions

17. 17 www.unmillenniumproject.org Education Needs Assessment Approach (2) Direct and indirect financial costs _ Estimation of teachers needed Estimation of classrooms needed Capacity Requirements __ = Total Education Needs

18. 18 www.unmillenniumproject.org Primary school interventions (1/2) * Not included in MP preliminary cost estimates

19. 19 www.unmillenniumproject.org Primary school interventions (2/2) * Not included in preliminary cost estimates

20. 20 www.unmillenniumproject.org Post-Primary Interventions and Targets

21. 21 www.unmillenniumproject.org Estimating Resource Needs: Education Needs Assessment Tool The Education Needs Assessment Tool allows users to translate intervention and target choices into quantitative estimates of financial and human resource needs Go to Education NA Tool 

22. 22 www.unmillenniumproject.org Key Drivers of Cost and Variation The key drivers of cost and variation in a comprehensive country-wide needs assessment are:  Differences in population in need  Differences in choice of interventions  Differences in income levels

23. 23 www.unmillenniumproject.org Guiding Principles of MDG Needs Assessments  “Absorptive capacity” constraints are real in the short term, but can be gradually relaxed through investments in human resources, infrastructure and management systems  Focus on interventions that require full or partial public financing  Include capital and operating costs for all sectors  Strive for maximum disaggregation  Ensure maximum transparency so that assumptions can be modified depending on country contexts and specific needs

24. 24 www.unmillenniumproject.org Guiding Principles of MDG Needs Assessments  Undertaken in national planning contexts  Target setting, identification of interventions, unit costs done in consultative manner, reviewed by technical experts  Periodic revision of targets/interventions based on new information and implementation of programs  Methodology can be adapted to suit local contexts, provided basic MDG assumptions remain- no “one-size-fits-all”

25. 25 www.unmillenniumproject.org Limitations Of Needs Assessments  Planning, not implementation tool  Input into planning process, not a plan in itself  A necessary, but not sufficient step for achieving the MDGs  Like all long term assessment tools, imperfect in ability to estimate long term costs, requires iteration  Requires complementary efforts in policy formulation, institutional structures, local decision making and regular review and monitoring

26. 26 www.unmillenniumproject.org Agenda  Objectives of MDG based needs assessments  Overview of different costing methodologies  The MDG needs assessment approach: a practical illustration from the education sector  Implementing a needs assessment process

27. 27 www.unmillenniumproject.org From the Field – Some Reflections  NDP Goals & MDGs  Programmatic Vs Sectoral Approaches  Adaptations

28. 28 www.unmillenniumproject.org From the Field – Some Reflections  NDP Vs MDGs –NDPs tends to have more goals than those of the MDGs –Consistency of the Methodology –Unit cost approaches

29. 29 www.unmillenniumproject.org From the Field – Some Reflections  Programmatic Vs Sectoral Approaches –NDP/S depart from PRSPs (in most part) » Mainly sectoral –Integrate!

30. 30 www.unmillenniumproject.org From the Field – Some Reflections  Adapting to the country-specificities –Build on data or studies that already exist –Adapt the techniques –MTEF/Budgets (more on day 4)

31. 31 www.unmillenniumproject.org From the Field – Some Reflections MDG Needs Assessments 2006 200 5

32. 32 www.unmillenniumproject.org Process of making national development strategies MDG based  High-level political commitment  Nationally-owned  Integrated into on-going processes  MDGs as outcome indicators  Inclusive with participation from key actors  Transparent  Regularly reviewed

33. 33 www.unmillenniumproject.org Illustrative organizational structure Office of the President/Prime Minister/ Ministry of Planning and Finance Oversight Group (led by Ministry of Finance or Planning, participation from line ministries, representation from UNCT) Thematic (PRSP) Working Groups (led by line ministries, including civil society, donors and UNCT, among others, covering different investment clusters such as rural and urban development, health, HIV/AIDS, education, gender equality, environment, science and technology)

34. 34 www.unmillenniumproject.org Example: the Process in Ethiopia Process »Existing PRSP technical teams brought into process »UN Agencies supported analysts in each sector »Government led the process and coordinated closely with UN Country Team and the World Bank Milestones »MDG needs assessment launched in August 2004 »MDG sector needs assessment drafts ready by November 2006 »Macroeconomic framework and synthesis work with support of World Bank »Draft PASDEP ready by December 2005