Making aid work better How can the Paris

Making aid work better How can the Paris Declaration make a d i f f e r e n c e ? Partnerships for aid effectiveness in the Western Balkans C h r i s t i a n L e h e m b r e Sarajevo 2 M a r c h 2 0 0 6 1

1 What is the problem? 2 Why the Paris Declaration will make a difference? 3 How will the Paris Declaration be monitored? 4 What are the key challenges? 5 Conclusions 2

Aid comes with a high cost… …for countries with limited administrative capacity New donor projects and activities per year (2001 - 2003) 85 0 80 0 75 0 70 0 65 0 60 0 55 0 Mozambique Ethiopia Tanzania Uganda Nicaragua Bolivia Vietnam 3

Why is aid underperforming? THE REALITY Too little coordination among donors Too many projects with different procedures ITS CONSEQUENCES Partner countries cannot handle these demands Low ownership over their own development process Poor development performance 4

1 What is the problem? 2 Why the Paris Declaration will make a difference? 3 How will the Paris Declaration be monitored? 4 What are the key challenges? 5 Conclusions 5

Three good reasons why the Paris Declaration will make a difference The PD goes beyond previous agreements The Paris Declaration creates stronger mechanisms for accountability The twelve indicators to monitor progress in achieving results 6

Reason 1 : The PD goes beyond previous agreements Has been endorsed by a much larger and more representative group Has been prepared with broader consultation Actions not words 7

From donorship to ownership Development Results 4 2 Alignment (Donors - Partner) 3 Harmonisation (Donors - Donors) Partners set the agenda Aligning with Using partners’ agenda systems Establishing common arrangements Simplifying Sharing procedures information Managing for Results 1 Ownership (Partner countries) 8

Reason 2 : The Paris Declaration creates stronger mechanisms for accountability Promoting a model of partnership From donorship to ownership – – Relying on country systems (para 21) Avoiding conditionalities (para 16) Decreasing number of projcts implementation units (21) Providing timely info on aid flows para. 49) Stronger Mechanisms for mutual accountability -International level 9

Reason 3 : The twelve indicators to monitor progress in achieving results First time donors & partner countries committed themselves to measure success in effectiveness How will we know whether the targets are achieved ? Creation of the Joint Venture on Monitoring the Paris Declaration 2006 baseline survey (Letter of 31 st. January) Other instruments such as – CGs & RTs – Peer reviews – Evaluations 10

What will it deliver? More ownership for recipients: – Greater control over aid funded development programmes. – Greater ability to plan aid. Less burden on recipients: – More coordinated arrangements. – Less duplicative missions, reports… Simplified rules of the game: – Transparency on aid delivery (commitments, disbursements…) – Simpler procedures 11

1 What is the problem? 2 Why the Paris Declaration will make a difference? 3 How will the Paris Declaration be monitored? 4 What are the key challenges? 5 Conclusions 12

Monitoring the Declaration Survey in a subset of 56 countries: – Participation in the Survey is optional. – To be launched in May 2006 & completed in August. – Final report in December 2006 & shared broadly. What will be monitored? – 12 Indicators of Progress. – Qualitative assessment for each country (optional) WP-EFF to coordinate internationally: – Design methodology & provide technical guidance. – Collect country data. – Draft final report. 13

12 Indicators of Progress OWNERSHIP 1 Partners have operational development strategies ALIGNMENT 2 Aid flows are aligned on national priorities 4 Strengthen capacity by coordinated support 5 Use of country systems 6 Aid is untied 10 Encourage shared analysis MANAGING FOR RESULTS Aid is more predictable 8 Use of common arrangements or procedures Strengthen capacity by avoiding parallel implementation structures 7 9 Reliable country systems 3 HARMONISATION 11 Results-oriented frameworks MUTUAL ACCOUNTABILITY 12 Reviews of mutual progress 14

Framework of Indicators 1 Survey Desk review Ownership – Operational PRS WB CDF 2 a Quality of PFM systems WB CPIA 2 b Quality Procurement systems JV-Proc. 3 Aid reported on budget 4 Coordinated capacity dev. 5 a Use of country PFM systems 5 b Use of country procurement system 6 Parallel PIUs 7 In-year predictability 8 Untied aid 9 Use of programme-based approaches 10 Joint missions & country analytic work 11 Sound performance assessment framework 12 Reviews of mutual accountability OECD DAC WB CDF 15

Information flow Country level Donors ’ Quest. EC WB UK Government Quest. Japan Etc. Consolidated worksheet Stimulate dialogue Strengthen mutual accountability Peer control 16

1 What is the problem? 2 Why the Paris Declaration will make a difference? 3 How will the Paris Declaration be monitored? 4 What are the key challenges? 5 Conclusions 17

Three key challenges Moving from principle to practice Changing the way we do business Making progress at country level 18

From principle to practice Making a reality of the Paris Declaration Implementing commitments at all levels: Demonstrating better performance: – Reviews of mutual accountability. – Indicators of Progress 19

Changing the way we do business Ownership: – Implement robust development policies & systems. – Build capacity for improved policies & systems. Alignment: – Donors use partners policies and systems where these are reliable. Harmonisation: – Donors coordinate their activities. 20

Progress at country level Need for country-level agendas for action Need to build local capacity to manage aid. 21

1 What is the problem? 2 Why the Paris Declaration will make a difference? 3 How will the Paris Declaration be monitored? 4 What are the key challenges? 5 Conclusions 22

Conclusions The Paris Declaration is all about changing behavior Disappointing results could make aid, not poverty, history First answer in Ghana in 2008 23

Thank you for your attention! 24