UNDP RBA Workshop on MDG-Based National Development Strategies Module 2: Technical Issues UN Millennium Project Febru

1. UNDP RBA Workshop on MDG-Based National Development Strategies Module 2: Technical Issues UN Millennium Project February 27-March 3, 2006

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

3. Motivation MDG Needs Assessments aim 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? www.unmillenniumproject.org

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

5. Objectives of an MDG Needs Assessment • Answer the question: “What will it take to achieve the MDGs?” • Translate the MDGs into operational targets • “Localize” the MDGs • Develop a strategy for increasing “absorptive capacity” • Can be used as a framework for assessing needs of other relevant sectors for the country • Strengthen coherence between planning and budget processes and guide programming of expenditures • Provide a monitoring and accountability framework • Support the national policy dialogue and negotiations with development partners www.unmillenniumproject.org

6. Approach to Aligning National Development Strategies with the MDGs MDG needs assessmentthrough 2015 Long-term plan aligned with the MDGs MDG-based development strategy • Short-term 3-5 year strategy to launch 10-year strategy, including: • MTEF • Macro framework • “What needs to be done right now?” • Quantify inputs needed to meet MDGs • “What” & “How Much” • Identify policies and institutions to meet needs • “How To” www.unmillenniumproject.org

7. What is an MDG Needs Assessment? • Who andwhere are the poor? • Identifying the population in need • Disaggregating the analysis • What needs to be done? • Focus on public investments (capital & operating costs) • Needs Assessment from now until 2015 • Goods, services, infrastructure • How much? • Local unit costs x population in need • Human resources required to meet each MDG • Infrastructure needs www.unmillenniumproject.org

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

9. Suggested Investment Clusters • Rural development • Urban development • Health systems • Education • Gender equality • Environment • Science, technology and innovation • Cross-national infrastructure • Public sector management www.unmillenniumproject.org

10. Agenda • Objectives of MDG based needs assessments • Overview of different costing methodologies • The MDG needs assessment approach: a practical illustration from the education sector • Process of MDG-based planning www.unmillenniumproject.org

11. Limitations of MDG Needs Assessments Question addressed: “Which interventions are needed across sectors to achieve the Goals, and what are the associated requirements in terms of human resources, infrastructure, and financing?” Limitations: • It is time intensive to develop detailed investment models • Data needs are high • Cross-sectoral dynamics cannot be modeled dynamically, but require iterative adjustment of coverage targets • Requires links to macroeconomic dynamics that need to be modeled with the help of separate tools • Does not identify complementary policies and institutional reforms www.unmillenniumproject.org

12. Comparison with ICOR-based Approaches Question addressed: “What aggregate level of investment is needed to meet the income poverty goal?” Limitations compared to needs assessment: • Cannot estimate human resource and infrastructure requirements • Provide no guidance to programming public expenditures • Lump together public and private investments, and don’t identify required changes in 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 and perform poorly in predicting growth and poverty rates www.unmillenniumproject.org

13. Comparison with Approaches Based on Input-outcome Elasticities Question addressed: “What aggregate level of investment is required to meet individual Goals?” Limitations compared to needs assessment: • Can only model a small number of aggregate variables across few sectors – often ignore interventions from other sectors • Bound by number of variables and equations necessary to close the models mathematically- so often do not reflect the full range of inputs needed to achieve the goals • Provide no guidance to programming public expenditures • Cannot estimate human resource and infrastructure requirements • Cannot avoid double-counting of interventions across sectors • Based on historical elasticities that apply only to marginal changes www.unmillenniumproject.org

14. Comparison with Approaches Based on Aggregate Unit Costs Question addressed: “What is the gap between current expenditures and those required to achieve each Goal?” Limitations compared to needs assessment: • Unit costs are based on current or historic expenditures, which may be a poor guide to future expenditures • Provides little guidance to programming expenditures • Cannot estimate human resource and infrastructure requirements for MDGs • Typically do not differentiate between capital and operating costs • Address only a subset of interventions within a sector • Cannot incorporate cross-sectoral dynamics www.unmillenniumproject.org

15. Agenda • Objectives of MDG based needs assessments • Overview of different costing methodologies • The MDG needs assessment approach: a practical illustration from the education sector • Process of MDG-based planning www.unmillenniumproject.org

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

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

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

19. Key Assumptions for Education Needs Assessment • Interventions: Comprehensive set of interventions to achieve primary education, secondary education and literacy • Targets: Coverage targets should aim at meeting MDGs for entire population • Investment model: Service delivery models should reflect local needs and education structure; unit costs should reflect costs for reaching hard-to-reach populations. • Financing: User fees should be eliminated for primary education www.unmillenniumproject.org

20. Interventions Needed to Meet Universal Primary Education (UPE) Goal • Direct Primary Education interventions: infrastructure, human resources, learning materials, demand side interventions, etc • Secondary Education interventions because: • For marginalized groups, post-primary education is needed to realize sufficient returns on education • Availability of secondary education increases parents’ incentive to send children to primary school • Secondary school graduates are needed to meet supply of primary school teachers • Adult literacy programs www.unmillenniumproject.org

21. Primary School Interventions (1/2) * Not included in MP preliminary cost estimates www.unmillenniumproject.org

22. Primary School Interventions (2/2) * Not included in preliminary cost estimates www.unmillenniumproject.org

23. Primary Education Targets • For primary education the net enrolment rate and primary completion rate to reach 100 percent, gross enrolment rate to reach 107 percent by 2015 • The gender parity target in primary education was to be achieved in 2005 www.unmillenniumproject.org

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

25. 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 www.unmillenniumproject.org

26. 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 www.unmillenniumproject.org

27. 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 • Identify all interventions that require full or partial public financing • Include capital and operating costs for all sectors • Undertake total, not incremental costing • Strive for maximum disaggregation • Ensure maximum transparency so that assumptions can be adapted to countries’ needs. No “one-size-fits all”! • Periodic revision of targets/interventions based on new information and implementation of programs www.unmillenniumproject.org

28. Agenda • Objectives of MDG based needs assessments • Overview of different costing methodologies • The MDG needs assessment approach: a practical illustration from the education sector • Process of MDG-based planning www.unmillenniumproject.org

29. 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 www.unmillenniumproject.org

30. Illustrative Organizational Structure Office of the President/Prime Minister/ Ministry of Planning and Finance MDG Strategy Group (led by Ministry of Finance or Planning, participation from line ministries, representation from UNCT) Thematic 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, education, gender equality, environment, science and technology) www.unmillenniumproject.org

31. Example: the Process in Ethiopia Process • Existing PRSP technical teams brought into process • UN Agencies supported analysts in each sector • UNDP coordinated with WB/UNCT together with the Government Milestones • MDG needs assessment launched in August 2004 • MDG sector needs assessment drafts ready by November 2005 • Stakeholder workshop and consultations • Macroeconomic framework and synthesis work with support of World Bank • Draft PASDEP ready by December 2005 www.unmillenniumproject.org