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This workshop held in Helsinki in 2003 discussed various modalities for supporting Poverty Reduction Strategy Papers (PRSPs) within the Finnish aid framework. It emphasized the importance of country-level partnerships with PRSPs at the core, utilizing comprehensive support mechanisms aligning with PRS cycles. The event explored the integration of donor funding into government budgets, performance matrices based on PRS indicators, and efficient monitoring systems to track progress. Various models and initiatives were evaluated, highlighting the need for improved aid coordination and consistency in messages between headquarters and field operations. The workshop also proposed alternative modalities to enhance aid effectiveness, including fostering partnerships with sub-national authorities and the private sector, and identifying funding mechanisms aligned with local institutional capacity building. Organizational issues like maximizing aid impact and boosting policy influencing skills were also addressed as key factors in aid effectiveness within the PRS context.
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Modalities for Supporting PRSs Finnish Aid in a PRS Context Helsinki Workshop 19-22 May 2003
One model • Country-level partnership with PRSP at the centre. CSP as business plan • General budgetary support aligned with country budget/MTEF and PRS cycle • Shared performance matrix based on PRS matrix with clear, mutually agreed triggers for on/off financing
……. • Fully predictable & harmonised donor funding fully integrated into Govt. budget & macro-framework • Govt monitoring & review systems used to assess performance linked to PRS review & results-oriented budget • Government identified TA financed from a pooled-fund supported by external partners
Possible/feasible/desirable? • It’s already happening (in patches) – DFID/SIDA/Netherlands/World Bank • Not clear yet whether the model is producing results (in terms of effectiveness/outcomes – see GBS evaluability study) • Some signs that it is helping to improve the way Govts. do business & enhancing aid relationships
But challenges lurk… • Can all aid agencies feasibly move in the same direction simultaneously? • What about successful initiatives that fall outside the scope of budget support? • Concerns about over-centralisation (PRSP/MTEF/GBS – role of MoF) • How to ensure a place at the ‘policy table’ for BS and non-BS donors (& NGOs)?
Alternative modalities • Consider different types/levels of partnership within broad PRSP framework e.g. work with sub-national authorities (India/South Africa) & private sector partners • Maximise overall donor effort by being selective with clear links to PRSP framework e.g. identifying projects & programmes with ‘upstream’ linkages & learning opportunities
Alternative modalities • Identify funding modalities that can be easily harmonised & are consistent with building local institutional capacity • Share analytic work/risk assessments which also help build country capacity – PERs, CFAA etc. • Link ‘projects’ to removal of key obstacles to PRSP implementation – at local or sector level
Organisational Issues • How to maximise the impact of aid in a PRSP context? • Alignment & harmonisation require greater on-the-ground capacity (at least initially!) • Requires greater consistency of messages between HQ & field • More emphasis on ‘policy influencing’ skills, though traditional technical skills still matter • More joining up/working with & through multilateral sources e.g. World Bank/EC/ UNECA/ AfDB/ADB etc.