Embracing the Paris Principles and AAA to Curb Corruption and Enhance Development Performance

1. Embracing the Paris Principles and AAA to Curb Corruption and Enhance Development Performance Mitchell O’Brien Governance Specialist Team Lead – Parliament Program World Bank Institute mobrien@worldbank.org

2. Outline • Paris and beyond • Country Systems (PFM) • Why Use Country Systems • Accra Agenda for Action (AAA) • Message from AAA • Capacity Building Priorities • What does this mean for Parliaments?

3. Paris and beyond Paris Declaration (2005) commitments: • Undertake reforms necessary to ensure national systems, institutions, and procedures for managing development resources are effective, accountable and transparent. • Donors would use “country systems” and procedures to the maximum extent possible (Target – At least 85% of aid flows reported on the national budget and where strong PFM systems, donors should use those systems).

4. Country Systems (Public Financial Management) • PFM = All components of a country’s budget process – both upstream and downstream • Upstream = Strategic planning, medium-term expenditure framework, annual budgeting) • Downstream = Revenue management, procurement, control, accounting, reporting, monitoring and evaluation, audit and oversight • Opportunity for parliaments???

5. Why Use Country Systems? Benefits to using country systems include: Increasing alignment Focus on common goals Supports sound budgeting and financial management Enhances sustainability of results Reduces costs for partner countries; and Facilitates harmonization between donors

6. Accra Agenda for Action (AAA) • AAA (2008) builds on the commitments contained in the Paris Declaration • Aims to accelerate progress by: (a) Providing predictability (Donors will provide 3-5 years forward information on their planned aid to partner countries (b) Using country systems (Partner country systems will be used to deliver aid as the first option, rather than donor systems; and (c) Relaxing restrictions (Donors will relax restrictions that prevent developing countries from buying the goods and services (importance of procurement oversight) they need from whomever and wherever they can get the best quality at the lowest price Source: OECD

7. Message from AAA • Ownership (Country-level policy dialogue, strengthen capacities, use country systems) • Partnership (Reduce aid fragmentation, increase aid value, work with all actors, engage civil society, adapt to fragile contexts) • Results (Deliver results, accountability and transparency, change conditionality, increase predictability) Source: OECD

8. AAA Capacity Building Priorities • Civil society and private sector – Enable them to play their role in capacity development • National, sector, and thematic strategies – ensure proper integration of capacity development priorities in them • Technical cooperation – work towards demand-driven efforts in technical cooperation and promote the use of local/ regional resources, including through South-South arrangements • Enabling environment – address the systemic impediments to local capacity development • Country systems – assess, strengthen and promote use of country systems to implement policies and manage public resources (Including procurement, PFM, results, statistics, information systems) • Fragile situations – tailor, phase and coordinate capacity building and development in situations of fragility, including countries emerging from conflict Source: Hradsky (OECD @ Train4Dev)

9. What does this mean for Parliaments? • New impetus for parliamentary engagement as part of country systems • Focus on streaming ODA through the national budget • Focus on strengthening parliamentary oversight of the budget and PRSP implementation • Essential for parliaments to scale-up capacity to oversee public procurement • Need for parliaments to engage more broadly with other actors in the country systems (SAIs, Procurement Authorities, Civil Society etc)