Integrating the PD into Development Programming

1. Integrating the PD into Development Programming A quest for reforming Public service Management? Lessons from Malawi

2. Preamble: Reforming the public sector • The PD is primarily about reforming the public sector or the development programming process, that is reforming how development strategies are formulated, how resources are allocated (budgeting), how PFM systems operate, how progress in implementing the strategies is monitored and improving the systems for holding those responsible people accountable for results. • These are all areas that the Government of Malawi is striving to make reforms and improvements

3. Preamble: Increasing Aid effectiveness or reducing the principal-agent problem of ODA? • Four of the five PD norms ( 1,2 4, 5) are to a significant extent about dealing with the problems of information and power asymmetry in delivering ODA, even as they address Aid effectiveness. • Development partners want to assure thru implementing the PD norms, that the resources they give will be used for the internationally agreed development agenda that is steered locally with strong national leadership and that • the implementation of the national development agenda will be monitored to make sure that this is the case. • This requires that national systems for procurement , financial management, and M&E are robust and also transparent to enable information to flow freely, so as to reduce information asymmetry. • It is possible to go about the PD primarily to respond to the information needs of DPs rather than to engender a genuine reform of the development programming process to increase the allocative and technical efficiency of, as well as accountability for, the resources used for development work.

4. Outline of presentation • Provides background of what has taken place to implement the PD • Takes each PD norm and explains • What has been done to put it into practice • what problems are encountered in doing so. • The way forward

5. Localizing the PD in Malawi • Process started late, in 2006. • We focused on creating the DAS and implementing quick wins • The DAS has an action plan - 26 actions (A-Z) with targets and means of monitoring progress of implementation • Quick wins have included The Joint country program review that has evolved into the MGDS annual review High level forum on Aid coordination Sector Coordination Groups • Malawi is also a pilot country for the Delivering as One of the UN • For the full DAS visit www.finance.gov.mw

6. National ownership and leadership over the development process • The Malawi growth and development strategy (MGDS) a second generation PRSP, that ascends economic growth as a durable way of reducing poverty. The MGDS represents a significant improvement in the process of formulation over the previous PRSP, in having been more participatory • It has five pillars: economic growth, social development, good governance, infrastructure, and social protection. • The priority areas selected for implementation are agriculture and food security, irrigation and water development, transport infrastructure development, HIV/AIDS and Nutrition, and integrated rural development

7. National ownership and leadership over the development process (2) • Problems in this area include: • Conflicting development partner perceptions on the realism of the MGDS, particularly the prioritization of activities and their costing and relating to the resource envelope, and its weak linkage to the budget. Solutions: • Reprioritization and costing of activities will be undertaken, and lead to a budgeting process that is coded to allow easy tracking of financing for the MGDS activities • Use the high level forum on Aid coordination to resolve some of the disagreements on a continuing basis

8. Alignment to the MGDS and national PFM, and M&E systems • Due to the problems mentioned above, DPs are very weakly aligned to the MGDS. • Some areas of the MGDs like social development has more resources. Infrastructure has a high level of participation but funding still falls short of the extent of prioritization given by government. • DPs tend to have inflexible CASs and funding procedures • PFM and M& E systems are still weak and DPs seeking to manage fiduciary risks still use their own systems.

9. Alignment to the MGDS and national PFM, Budget and M&E systems (2) • Solutions • Accelerate the process of implementing the PFEM Action plan • Designate sector leaders among DPs and create an Aid map that facilitates the allocation of DP resources to enable even funding of the MGDS themes • The GFEM, PFEM Steering Committee and high level forum on Aid coordination should be used to resolve some of the issues. • Government to set its foot down on some unprofitable DP behavior

10. Harmonization • The major way in which the harmonization agenda is being pursued is thru use of PBAs, a SWAps exists only in the health sector, • long and painful gestations of SWAps/PBAs in agriculture, water, transport and education. • pooled funds exist in HIV/AIDS and Education • DPs have their own coordination groups structured around sectors

11. Harmonization (2) • DPs still cling to their individual policies. Despite PD no DP country has done away with its own polices such that even harmonization arrangements like JFA and MOU for SWAps and GBS are subject to bilateral agreements. • Government has not been strong to get DPs to act together. Designating sector leaders and refusing to see any other donor for sector issues could help in this direction • Government should also provide clear guidelines on missions, reviews and studies to emphasize that they should be done jointly.

12. Managing for Results MGDS M&E system is being developed and rolled out to the districts The MGDs annual review has been piloted this year and should be improved next year Sectors review that existed only in the health, education and HIV/AID sectors are being extended to the other sectors and being institutionalized as part of the MGDS annual review process

13. Managing for Results (2) • The MGDS annual review process will be the main route for implementing the managing for results norm. The process is fraught with problems that must be addressed quickly • Systems of collecting and analyzing data on program implementation and monitoring progress on outcomes are weak • Capacity to carry out some of the M&E work is still lacking • leadership problems in the sectors and overall undermine the process • Government is seeking to strengthen the M&E and has secured a pooled fund to achieve this

14. Mutual accountability • Government is to be held accountable thru the sector and MGDS annual reviews, and also parliamentary processes. But civil service performance management is still weak. The extent to which DPs feel accountable for development results can not be ascertained. Some of the activities we are implementing to go in that direction are as follows: • Institute an Independent monitoring group to periodically assess the Aid relationship; • Incorporate into PAFs of GBS indicators on DP performance. Evaluate the GBS process every 3 years • Use the OECD DAC PD survey to bring peer pressure on performance among DPs • Use the MGDS annual review and the Sector coordination groups and the national high level forum on Aid coordination to highlight areas where both govt and DPs can improve performance

15. Conclusion • The GoM has made significant strides in implementing the PD, thru initiating the reforms that can lead to the attainment of the targets of the 12 PD indicators, in some cases these reforms are pursued as part of the civil service reform rather than being consciously implemented to localize the PD. This only goes to support the view that the PD can be implemented as part of genuine nationally owned activities to improve the public service rather than responding to the needs of DPs. • The DAS has been formulated to provide a road map to the process of localising the PD • There are constraints in localizing PD norms: problems in holding out the MGDS as a nationally owned development agenda due to weakness in operationalizing it for implementation; weak but reforming PFM systems, slowly harmonizing DPs, and nascent data systems for M&E. Accountability systems for both Govt and DPs are still weak. The national leadership is now beginning to take these challenges seriously.