AAA and Capacity Development

1. AAA and Capacity Development Theme: Country Systems

2. Context • AAA Statement: Donors and partner countries will strengthen and use partner country systems to the maximum extent possible. Enhancement of these systems requires consideration of external factors that may strengthen or weaken opportunities to share system capacity. • Country Systems is understood here to include: PFM, procurement, statistics, audit, M&E, results frameworks • Why important ?: >Performing/accountable state: generic capabilities relating to the core functions of government that need to be in place for effective and transparent management of public resources >aid effectiveness: progress towards working through country systems, reducing PIUs, promoting harmonization and alignment behind country driven policies/strategies depends on core systems being in place that meet minimum standards of functionality • Workshop in March 09 leading to Issues Brief 1: key CD considerations raised

3. Issues Arising • Avoid Technocratic Approaches - Experience suggests that efforts have been overly technocratic and have not taken adequate account of the drivers and impediments to change and reform. More need to think about timing, opportunity, building constituencies for change etc. (2) Avoid Silos – Too much support remains highly fragmented (donor projects, entry points etc.) Work towards more joined up approaches (3) Take Care of Priorities and Sequencing – different needs depending on context: MIC or fragile situation. Take account of history and state formation priorities. Avoid overloading (4) Refrain from blueprints and best practice – Think about good fit and good enough approaches. Avoid raising bar too high and imposing donor view of what is important. (5) Multi-actor Approach – Think beyond state capacity only. Consider role/contribution of stakeholders in civil society (parliaments, representatives of the private sector and interests groups, the media etc.)

4. AAA and Capacity Development Theme: Incentives and the Enabling Environment

5. Context “Developing countries will take the lead in addressing key systemic issues that undermine capacity development, with support from external partners as required” Bonn Consensus on CD, May 2008.

6. Issues Arising Context matters for CD at different levels: State formation process Economic development - diversification Institutional, political and social conditions Demand-side factors: citizen/client demand, oversight Governance mechanisms Cross-sector incentives to performance Personified stakeholders What matters most? Who can influence, and how?

7. What donors can do Recognise what politics, informality and incentives means for donor behaviour Implications: learn from the real difficulties of changing donors, and be more modest when trying to help others to change? Recognise the effect of fragmented and parallel donor financed projects which create perverse incentives undermining partner capacity Implications: Pay as much – or more –attention to meeting AAA-commitments than to preach about and support CD directly? Understand the specific importance of the context for CD. Implications: Get out of the offices, have field presence, employ staff a nose for politics, power issues, and informal networking?