Supporting Sector Programmes

1. Supporting Sector Programmes A three - day learning event SWAP Joint Learning Event

2. Objectives • Key components of a sector programme and the language used • Conditions for success and best options to support to the process • Know your own and others’ roles • Deal with major risks and challenges, and... • Identify the next steps to move the process forward SWAP Joint Learning Event

3. The Topics SWAP Joint Learning Event

4. Module 1: The Aid Agenda & key SWAp concepts Sector Approach Sector Programme Support to Sector Programmes SWAP Joint Learning Event

5. The lessons leading to the aid agenda • Failure to improve the lives of the poorest • Low aid effectiveness due to: • Weak states • Fragmentation • Multiple donors and approaches • Skewed accountability SWAP Joint Learning Event

6. The agenda: poverty reduction Strengthen local ownership over decision-making on policy, strategy and spending Increase coherence between policy, spending and actual results Use/strengthen partners’ systems, harmonise donor systems SWAP Joint Learning Event

7. Harmonisation & Alignment SWAP Joint Learning Event

8. The result: Programme Based Approaches “PBA is a way of engaging in development cooperation based on the principle of co-ordinated support for a locally owned programme of development such as a national poverty reduction strategy, a sector programme, a thematic programme or a programme of a specific organisation” SWAP Joint Learning Event

9. The ‘new’ approaches allow for: • Focus on effective policy processes and governance: comprehensiveness, consultation processes, accountability • Focus on government: linking policies and the budget process • Focus on other national stakeholders: private sector and civil society role & participation • Focus on donors and aid: coordination, harmonization, alignment SWAP Joint Learning Event

10. Core principles …participatory, involving parliament & civil society …country driven, not donor driven The process is… …results-oriented …partnership based …prioritised: implementation feasible …comprehensive – reflecting multi-dimensions of poverty SWAP Joint Learning Event

11. Budget support Macro level e.g. PRSP Agreement on poverty policy results Donor procedures Budget support Sector level e.g. Health agriculture Pooled funding Agreement premature or non-public actors Donor procedures Donor procedures Projects Overview – Programme Based Approaches Approach Modality Policy dialogue SWAP Joint Learning Event

12. What is the Sector Approach? A way of working of government and partners with three distinct objectives: Ensure local ownership over decision-making on policy, strategy and spending. Increase coherence between policy, spending and actual results Use/strengthen partners’ systems, harmonise donor systems SWAP Joint Learning Event

13. What is a ‘Sector’? • Defined by the government • Wide to ensure coherence, narrow to limit complexity • Fairly coherent & consistent policy • Institutional framework • Budget framework • Links to macro framework SWAP Joint Learning Event

14. Who are the sector stakeholders? Donors Powerful elites Citizens, service users Private service providers Legislative, policy makers Executive policy makers Front line staff Central level bureaucracy Supervisory bodies, legal system Unions SWAP Joint Learning Event

15. What is a Sector Programme? A Sector Programme is a product of the Sector Approach. It is a government (not donor) programme SWAP Joint Learning Event

16. Sector programmes: 5 typical elements Public finance management Sector policy in macro-framework Services and enabling environment Accountability & Performance monitoring Institutions and capacities Aid alignment and harmonisation SWAP Joint Learning Event

17. Pursue the sector approach Joint policy dialogue Financial support Facilitation, catalyzing, networking Foster knowledge acquisition Five means of donor support to emerging or existing SPs Sector programme SWAP Joint Learning Event

18. Three financing modalities for support to a SP Budget support Pooled funding Donor procedures ...or a combination of these SWAP Joint Learning Event

19. Financing modalities Other Sector national budget revenues support ‘Pool Fund’ Donor X Donor Y Donor X Donor Z PPP Through Treasury Co-financed activities Projects Sector Programme Own funds SWAP Joint Learning Event

20. Financing modalities Other Sector national budget revenues support ‘Pool Fund’ Donor X Donor Y Donor X Donor Z Through Treasury Co-financed activities Projects Sector Programme SWAP Joint Learning Event

21. Aid instruments and associated burdens Monitoring On/off budget Governm. Donors On Off Disbursement channel/system Procurement conditions Donor Government Untied Tied Donor Govt. Narrow Broad Tech. Assistance Targeting SWAP Joint Learning Event

22. Sequencing in Sector Programmes Earlier Later Policy and strategy dialogue Strengthened coordination Single SP document Medium term expenditure framework Common monitoring Harmonization and alignment of procedures No fixed pattern….but some things are often earlier in the process SWAP Joint Learning Event

23. Assessment of Sector Programme elements • Why assess? • Agree where and how support is needed • Agree on issues for analysis and dialogue • Keep track of changes, adjust plans & support • What to assess? • The 5 elements • When to assess? • Continually • How to assess? • Next modules! Sector policy in macro-framework Public finance management Accountability & performance monitoring Services and enabling environment Institutions and capacities Aid alignment and harmonisation SWAP Joint Learning Event

24. Module 2: The policy framework Sector policy in macro-framework Public finance management Accountability & Performance monitoring • Key issues: • Policy-making • The macro-setting • Assessing the sector-policy • Assessing policy processes • From policy to actions Services and enabling environment Institutions and capacities Aid alignment and harmonisation SWAP Joint Learning Event

25. The Policy-Results chain National & Sectoral Policy • Set priorities & phasing • Strategic planning, medium term financing • Operational planning • Public finance management and accountability systems • Implementation • Performance Monitoring & Client Consultation systems Approved annual budgets Feedback Process Institutional assessment Actual Spending Service Delivery / Results SWAP Joint Learning Event

26. Understanding policy making • Policies are about politics and interests – creating winners and losers • Policies and strategies are rarely fully clear and consistent • Policy making does not stop with a paper or plan • Policy making is not a linear process • Policy without power is pie in the sky SWAP Joint Learning Event

27. Assessing the sector in the macro context • Is macro-economic framework conducive for sector progress? • Some consensus and broad endorsement of macro-policies and strategies? • Articulation between national policy and sectoral policy? • Sector stakeholders appropriately involved in macro-policy processes? SWAP Joint Learning Event

28. Assessing the sector policy • Goals adequately pro-poor? • Goals accommodating elite interests? • Goals reasonably specific and results oriented? • Long term affordable? • Priorities matching resources and capacity? • Focus on whole sector needs? SWAP Joint Learning Event

29. Assessing the sector policy process • Authored by government and domestic stakeholders? • Evidence based? • Permanent stakeholder consultation channels? • Endorsed by cabinet and parliament? • Endorsed by power elites? • Publicly available? • Will policy failure have political consequences? SWAP Joint Learning Event

30. Assessing the policy-plan-action links • Track record? • Fairly clear roles & responsibilities? • Proliferating and disconnected planning processes? • How much remains “off plan/off policy”? • Local governments “on policy”? • Intra-sector link, cross-cutting issues? SWAP Joint Learning Event

31. Module 3: Public finance management Sector policy in macro-framework • Key issues: • The policy - budgets results link • The MTEF – principles and practices • Financial accounta-bility to the public • The quality of PFM • safeguard concerns • Implications for SP Public finance management Accountability & Performance monitoring Services and enabling environment Institutions and capacities Aid alignment and harmonisation SWAP Joint Learning Event

32. What do we expect of the PFM system? Financial accountability to the public Strategic allocation of resources PFM System (Budget –MTEF-Accounts-Audit) Aggregate fiscal discipline Efficient service delivery SWAP Joint Learning Event

33. For whom is PFM important? • Citizens: developmental and fiduciary interest • Government: development and policy goals • Donors – to support successful aid delivery and utilisation (including issues of accountability “at home”) Issues and challenges: • Focus shifts from budget allocation to accountability and FMIS - but all dimensions are important • Capacity: how to strengthen institutional capacities? • How to ensure political buy-in? SWAP Joint Learning Event

34. Public financial accountability • The role of parliament • The role of an independent Auditor General • Timely and widely available public accounts/ budget out turns • Ombudsman • Think tanks, elite(s) pressure groups • Media SWAP Joint Learning Event

35. Accounting and monitoring Budget execution Policy review Budget Strategic planning Budget preparation The annual budget cycle – transforming plans to spending Service outputs Reporting and audit SWAP Joint Learning Event

36. The budget process • Allocating resources to policy priorities – who participates and is their a medium term view • Predictability • A clear budget calendar – what information and negotiation is needed when, where and between whom • Monitoring of budget out turn and reporting • External scrutiny and audit SWAP Joint Learning Event

37. Disciplined top-down/bottom-up processes Strategic macro level budget framework Macro fiscal framework Analysis of cross cutting issues Analysis of inter sectoral resource allocation issues Sector resource ceiling Sector strategies Programme resource allocation Resource implications of sector policies and strategies Identification of new efficiency measures Review of expenditure programmes SWAP Joint Learning Event

38. Prioritised affordable sector policy framework Implementation MTEF 3-5 year sectoral expenditure frameworks Annual Budget Linking spending to policy while maintaining fiscal discipline Medium term fiscal framework Hard budget ceiling Service outcomes Medium term budget expectation SWAP Joint Learning Event

39. Medium term financing process • Can help look at alternative sector policy financing scenarios • Strategic role in informing budget preparation • May or may not lead to a separate document • Status may differ - depends on country • Ideally includes: history, policy, objectives, priorities and financial tables SWAP Joint Learning Event

40. Making medium term planning realistic OECD/DAC GoodPractice Paper 2- Be pragmatic: • Build sector expenditure framework progressively • Look at affordability issues, cost structure, drivers of costs • Be comprehensiveness: all (public) funding • Don’t stop at policy planning SWAP Joint Learning Event

41. PFM reforms and implementation of Sector Programmes • Possible focus of PFM reform for SPs & MTEF: • Budget classification/ accounting coding • Budgeting techniques and “link to performance” • Shift in, and strengthening of control systems • Cash flow planning and budget management • In-year reporting and monitoring FMIS • Procurement BUT – how far can the sector ‘go it alone’? SWAP Joint Learning Event

42. PFM reform: any good practice? Realistic strategy: • Sequence and prioritise reforms • Coordination (incl. donor support) paramount • Comprehensive capacity development including incentive issues • Ensure political support to tackle vested interests in “status quo” • Monitoring PFM reforms using PEFA SWAP Joint Learning Event

43. PFM good practice PEFA: 6 key characteristics, 31 indicators • Credibility of the budget • Comprehensiveness and transparency • Policy-based budgeting • Predictability and control in budget execution • Accounting, recording and reporting • External scrutiny and audit SWAP Joint Learning Event

44. Module 4: Institutions and capacities Sector policy in macro-framework • Key issues: • External drivers • Incentives • Output focus • Joint support to CD Public finance management Accountability & performance monitoring Services and enabling environment Institutions and capacities Aid alignment and harmonisation SWAP Joint Learning Event

45. Capacity and Capacity Development • Look for external drivers of and constraints on capacity beyond the sector • Assess incentives and disincentives to performance • Use outputs as proxy indicator for capacity • Joint approaches to CD support SWAP Joint Learning Event

46. Contextual factors beyond influence Contextual factors within influence Capacity of sector organisation(s) Inputs Out-puts Out-comes Im-pact The Open Systems Model Governance SWAP Joint Learning Event

47. The context shapes capacity • Domestic pressure on the sector to deliver? • Effective oversight? • Enabling legal framework? • Predictable resources? • Cross-sector civil service conditions? SWAP Joint Learning Event

48. Incentives and disincentives • Good systems, structures, processes..but: • Getting incentives, motivation and power to perform right may be biggest obstacle • Distorted incentive regime often beyond sectoral repair • Sector capacity development ambitions has to be adapted to this SWAP Joint Learning Event

49. Two complementary dimensions of capacity SWAP Joint Learning Event

50. Outputs as proxy for capacity • Immediate effect of capacity: sector outputs! • Past outputs trends often point to likely future • Focus on outputs can involve users • Output focus for CD – rather than focus on inputs (TA, training) SWAP Joint Learning Event