ASSESSING AGENCY EFFECTIVENESS AND BUILDING CAPACITY FOR MUTUAL ACCOUNTABILITY

1. ASSESSING AGENCY EFFECTIVENESS AND BUILDING CAPACITY FOR MUTUAL ACCOUNTABILITY Matthew Martin Debt Relief International 3rd MfDR Roundtable Hanoi, 7 February 2007 DRI, February 2007

2. STRUCTURE • Introduction and Context • Assessing Agencies: the Views of 36 HIPCs • Using the Assessments to Build National Aid Strategies • Using the Assessments at the International Level (donors/groups) DRI, February 2007

3. INTRODUCTION AND CONTEXT • HIPC Capacity-Building Programme works at demand of 36 HIPCs to build (unleash) capacity to manage government financing (orig. debt relief) • Funded by six DAC donors (Austria, Canada, Ireland, Sweden, Switzerland, UK) • Capacity-building organised in country by sustainable regional organisations run by developing countries – “working out of job” • Presentation based on country results/views • Earlier summaries prepared for UNDP and UK CFA, currently updating for ECOSOC • For more details see www.development-finance.org and www.hipc-cbp.org. DRI, February 2007

4. METHODOLOGY - PROCESS • Designed through consultative process with all government aid managers and Ministers lasting 12 months, to ensure all key concerns of countries included • Clearly benchmarked setting quantifiable targets against donor best practices and Paris commitments • Evaluations continually updated since 2002 – 1/3 of countries each year now moving to 1/2 • Evaluations conducted in country by 20-30 aid management officials and based on examining data and documents, not opinions – simultaneously builds capacity • Can be/is being applied to all funders (incl multilateral, bilateral, vertical funds/NGOs/ECAs, commercial) • Constantly developing at country request – currently adding in new criteria on quality of results, cost-effectiveness • Also analyse effectiveness of own policies/procedures DRI, February 2007

5. METHODOLOGY - CONTENT • Based on 34 criteria under 22 groups relating to policies and procedures • Includes detailed evaluation of progress against Paris, but goes beyond to include eg conditionality, flexibility to finance against shocks, coverage of all key sectors of PRS • Policies: concessionality, types of aid, channels (on-budget), sectors (PRSP and all priorities), TA (country-led and genuinely capacity-building), flexibility (against shocks or for new country priorities), predictability (multiyear, aligned disbursement calendar, disbursed on schedule), conditionality (number/enforcement/delay), policy dialogue (activism and alignment with country or BWIs) • Procedures: conditions precedent (PIUs, CPF, appraisal, financial and legal), disbt methods, disbt procedures separate from government (PSI, accounts, reports, audits), procurement procedures (untying, local sourcing), harmonisation (joint missions, analytical work), alignment with partner PFM and procurement - and delays at all stages • Advocacy of and responsiveness to genuine mutual accountability DRI, February 2007

6. RESULTS • Overall priorities different from Paris – worst areas are flexibility against shocks and excessive conditionality • MULTILATERALS VS BILATERALS • Multilaterals better at: on-budget, untying • Bilaterals better at: concessionality, less conditionality, fewer conditions precedent, more advance disbursements • INDIVIDUAL DONORS • Best performing multilaterals: IDA, some UN, EDF, IFAD, IMF • Some non-traditionals perform better>some DAC • But high degree of variation across partners due to different performance by donors DRI, February 2007

7. DONOR/CREDITOR POLICIES DRI, February 2007

8. DONOR/CREDITOR PROCEDURES DRI, February 2007

9. WHAT FOR ? USING RESULTS FOR NATIONAL AID STRATEGY • Vital to design own strategy principles (eg including non-Paris aspects) • Then discuss further with donors – not abandon but clarify policies • Do own monitoring of donors from data/documents – not rely on self-reporting, validate vs budget • Build sustainable government capacity not use consultants • National Compendia of Donor Practices • Complement Paris Surveys (or sole source) to set baselines • Global Compendium of Donor Best Practices • Through exchange among 36 HIPCs • Compare National and Best Practices to plan further potential/planned improvements DRI, February 2007

10. WHAT FOR ? USING RESULTS FOR NATIONAL AID STRATEGY • Design donor-by-donor strategies to accelerate alignment, spread best practice and set donor-by-donor annual targets • Aggregate to work out seriously prospects for Paris and other improvement • Diversify (the issue for most LICs) using knowledge of good performers in other countries • Or rationalise donors if cant improve, to make aid effective • Negotiate constantly to improve donor performance on each project • Refuse offers of bad funding (“free riders”) in order to enhance aid effectiveness • Publicise donor performance to accountable to targets • Improve own performance of government • Use independent monitoring to resolve tricky issues DRI, February 2007

11. USING RESULTS AT THE INTERNATIONAL LEVEL (1) • FOR EACH DONOR/CREDITOR: • Should organise annual partner consultations where HQ can be told by group (less retaliation risk) about strong/weak points and discuss how to spread best practices and reduce variability (except where justified by partner performance) • Needs to go beyond performance at country level to assess global issues eg allocation criteria, scaling up, orphans • Can also be informed of partner views about eg relative performance of multilaterals, NGOs, vertical funds • Should be assessed under Paris by degree to which sign up to bilateral targets at national level and organise annual partner consultations • Self-evaluations/independent evaluations should include strong, comprehensive partner evaluation • Also vital partners understand Paris and have frank discussions with donors about progress on partner indicators DRI, February 2007

12. USING RESULTS AT THE INTERNATIONAL LEVEL (2) • REGIONAL DISCUSSIONS • Meetings of regional recipient governments with regional donors and regional organisations to express views • Key role of regional organisations in assembling and expressing views (but who is independent ?) • GLOBAL DISCUSSIONS • Africa Partnership Forum needs to be more Africa-led in assessing Monterrey/Gleneagles commitments • Why Africa so privileged in G8 ? Why not similar discussions with Asia and Latin America groups ? • Division of labour to play to strengths: DAC (at least to collect Paris info through normal data and report in Peer Reviews), Independent 3rd party to write global report, IMF/World Bank to disseminate through GMR ? ECOSOC to discuss at high-level ? DRI, February 2007

13. WHAT IS NEEDED ? • DONOR POLITICAL OPENING • Clear demonstration that countries can go beyond Paris both in breadth and ambition • Opening to bilateral targets (Mozambique?, Rwanda) • Not all donors will move – use best practice • Not all partners will achieve ? (like-minded, capacity) • PARTNER SELF-CONFIDENCE • Being prepared to discuss honestly with partners • Moving from paper-pushing to accountability • Learn best practices in choosing best aid for results • CAPACITY-BUILDING • Massive needs of technical officials in evaluating, forecasting and negotiating aid alignment • Vital role of parliamentarians, AGs, civil society in assessing not just execution of spending but results • Major shift in all three or little chance of Paris/MDGs DRI, February 2007