Guidance Note: UNDP Support To Country-Level Aid Coordination Mechanisms (April 2011)
Guidance Note: UNDP Support To Country-Level Aid Coordination Mechanisms (April 2011)
Guidance Note: UNDP Support To Country-Level Aid Coordination Mechanisms (April 2011)
April 2011
Overview
We in the developing countries must own the development agenda, and our partners have to align their support to our agenda, our priorities and the sequencing we have set for ourselves... Development cannot be imposed, it can only be facilitated.
President Benjamin Mkapa, United Republic of Tanzania, November 2004 Across the world, UNDP is working to support programme countries to strengthen their capacities to coordinate and evaluate the impact of external development assistance in line with national development plans and priorities. The United Nations development system is mandated to do so by the United Nations General Assembly and the United Nations Economic and Social Councils triennial comprehensive policy review (ECOSOC/TCPR), as well as the resolutions on the High-level Dialogues on Financing for Development.1 UNDPs work is underpinned by the recognition that capacity development and ownership of national development strategies are essential for the achievement of internationally-agreed development goals, including the Millennium Development Goals (MDGs). UNDP therefore supports efforts and initiatives to enhance the quality of aid and its impact, such as the Paris Declaration (PD) on Aid Effectiveness and the Accra Agenda for Action (AAA).
This guidance note provides a brief overview of the conceptual framework for UNDP support to country-level aid coordination mechanisms, with reference to principles of aid and development effectiveness and UNDPs approach to capacity development, and with a view to supporting national development planning strategies and processes. It provides practical step-by step guidance on how UNDP country offices can support the government in establishing and/or reforming existing aid coordination mechanisms, depending on their particular country context, and how UNDPs support to country-level aid coordination mechanisms links to efficient and effective coordination of the development work of the United Nations Country Team (UNCT).
1
See General Assembly Resolution A/RES/62/208 and related documents on the TCPR of operational activities for development of the United Nations system. For more details on the High-level Dialogues on Financing for Development, see the website of the Financing for Development Office.
Conceptual framework
Over the last decade, international aid architecture has evolved rapidly. The development landscape at country level has changed dramatically with the emergence of new players, new modalities, and additional challenges. Despite this rapidly evolving context, official development assistance (ODA)2 continues its crucial role of empowering programme countries to leverage other sources of development finance such as foreign direct investment, remittances and others and to help manage the various resource flows for better development effectiveness. Based on the conviction that the national government holds primary responsibility for its countrys development and for coordinating all types of external assistance, UNDPs support to programme countries is geared towards strengthening their capacities to do so effectively and efficiently and to assume ownership and leadership over this process. At the same time, UNDPs work aims to enhance efforts and initiatives to improve the quality and impact of external assistance, including the PD on Aid Effectiveness and the AAA. While external assistance can have a catalytic effect on development outcomes, UNDP takes the view that ODA is just one element of national public finance, alongside domestic revenues and loans. For UNDP, aid effectiveness is therefore part of a larger concept of development effectiveness and UNDPs support to aid coordination and management is geared towards supporting national counterparts in effectively integrating external assistance into their national development processes.
Aid effectiveness
At the global level, the drive to improve the effectiveness of external assistance gained momentum with the launch of the MDGs in 2000, the 2002 International Conference on Financing and Development in Monterrey, and the World Summit in 2005. United Nations Member States instituted in 2003 the High-level Dialogues on Financing for Development and called for the establishment of a Development Cooperation Forum (DCF) as an inclusive forum to discuss key policy issues affecting the quality and impact of development cooperation. The Development Assistance Global commitments for aid and development effectiveness Committee of the Organisation for Economic Co-operation and Development (OECD/DAC) also launched a process of high level Millennium Summit, 2000 Millennium Development World Summit, 2005 fora, starting with the Rome High-Level Forum on Harmonisation Goals World Summit, 2010 in 2003. At the 2nd High-Level Forum on Aid Effectiveness in Paris in 2005, over 100 donors and programme countries endorsed the Monterrey Consensus, 2002 Financing for Paris Declaration on Aid Effectiveness. The PD includes five Development Doha Declaration, 2008 principles and 12 progress indicators that are being monitored Development Development Cooperation Forum 2008 until 2011. The 3rd High Level Forum on Aid Effectiveness in Accra Cooperation Development Cooperation Forum 2010 in 2008 resulted in the endorsement of the Accra Agenda for Forum Action. The AAA highlights the need for capacity development, Aid Effectiveness Rome Declaration on Harmonisation, 2003 the use of country systems, aid predictability, and mutual Paris Declaration on Aid Effectiveness, 2005 accountability, among others. At the Accra forum, six countries in Accra Agenda for Action, 2008 situations of fragility also decided to launch the first survey on the Conflict and Principles for Good International Principles for Good International Engagement in Fragile States Fragility Engagement in Fragile States and Situations and Situations, which complement the PD Principles. The PD highlights ownership, alignment, harmonization, management for results and mutual accountability as the key principles to make aid more effective at the country level. Two surveys have already been conducted in 2006 and 2008 to monitor progress on implementing the PD, and a third survey will be conducted in 2011. The surveys indicate that progress has been made but not fast enough to reach all of the targets. In particular, even though programme countries have made progress in improving their national systems, donors need to make more efforts in strengthening and using country systems in a way that reinforces country ownership of aid. Moreover, donors and programme country governments need to improve accountability for the use of external resources. This means not just increased domestic accountability for the use of development resources, including strengthened parliamentary oversight of the use of public resources, but it also obliges donors and programme countries to establish mechanisms to hold each OECD DAC United Nations
The OECD defines ODA as official financing to promote economic development and welfare, with a grant element of at least 25 percent. See OECD Glossary of Statistical Terms.
other mutually accountable for their commitments. Finally, development resources need to be managed more cost-effectively, which requires more effort by donors to harmonise their support and improvements in government-led aid coordination.3 The 8th MDG, which calls for a global partnership for development, reflects an agreement among world leaders that strong international partnerships are crucial to achieve the MDGs. Such a partnership includes ODA, but MDG 8 indicators go beyond aid to include trade and market access, debt sustainability, access to affordable essential medicines and access to new technologies. While there has been progress, greater efforts are needed for a coherent international enabling environment for development.4 Policy coherence is needed so as not to undermine advances in development through contradictory policies. Nonetheless, ODA can be a catalytic instrument that supports internal resources and other development assistance financing instruments. The effective utilisation of aid is conducive to the effective use of all development resources but needs to be supplemented by an enabling environment in other policy areas.
Capacity to engage stakeholders To what In the context of development effectiveness, capacity development Capacity to assess a situation and define a vision end? Capacity to formulate policies and strategies means that countries work to make their institutions resilient and (functional Capacity to budget, manage and implement capacities) strong and their country systems reliable and sound to improve the Capacity to evaluate services delivered to their citizens. They can do so by building on existing national and local capacities to effectively and transparently manage public resources for human development, including ODA. The AAA highlights that all external support to capacity development needs be demand-driven. Technical cooperation can provide a useful means of knowledge transfer, if based on national policies and priorities and underpinned by the recognition that training efforts must be delivered in an effective and holistic manner to further capacity development. Since development cannot be imposed from outside, technical cooperation by definition is never a means to its own end. It serves its purpose only if it contributes to the empowering and strengthening of endogenous capabilities. In this logic, capacity development and aid effectiveness principles go hand in hand. They are the means that enable developing countries to formulate and implement their own national development strategies for the achievement of sustainable development.
3 4
See Surveys on Monitoring the Paris Declaration. See MDG Gap Task Force Reports.
Yet when ODA is not directly channelled through the treasury of the recipient government, the nature and complexity of current modalities of external assistance often delink the management of external assistance from other sources of national public finances. Even though many donors have committed to use country systems to the maximum extent possible, budget support only accounts for a fifth of all development assistance according to the PD Monitoring Survey 2008 and many donors are falling behind in their commitment to increase the use of country systems. UNDP takes a pragmatic view towards support for country-level aid coordination, recognizing that in various circumstances donors might be likely to continue channelling a large proportion of external assistance outside of the recipients national treasury. So long as multiple channels for external resource allocation continue to exist, recipient countries need to be enabled to coordinate all types of support and manage information on external sources of finance for the benefit of coordinated development planning, implementation and monitoring and evaluation (M&E) as well as for a transparent and accountable use of other public financial resources.
The demand for greater transparency in public finance is a worldwide trend. Until the late 1990s, diagnostic work in public expenditure focused largely on only one aspect of public financial management the budget process through public expenditure reviews. The emphasis has now shifted from management to the governance of public resources, which inherently involves issues of internal control, the availability of reliable and timely public accounts, the availability of performance reports and the conduct of professional external audit. Domestic accountability of governments to their citizens also closely relates to mutual accountability between governments and development partners. While governments need to be accountable to parliament and the wider public and engage stakeholders in strategy development and implementation of national development strategies, development partners need to provide transparent and predictable information on external resource flows to enable governments to account for them to their citizens.
Practical guidance
A country-level aid coordination mechanism that fosters development effectiveness should be anchored in the national policy and budget cycle. Yet, all too often, coordination mechanisms are instead established to respond to donor needs and reporting requirements. When advising governments on optimal structures for aid coordination mechanisms, UNDP highlights the following points to ensure that aid coordination mechanisms are government-led and support national development planning processes:
Aid coordination structure: Aid coordination mechanisms should integrate aid into already existing public service structures and improve capacities from within. Aid coordination mechanisms need to be compatible and align with intra-governmental coordination mechanisms (whether or not they correspond to national development strategy priority areas). An effective aid coordination structure should comprise both a political and a technical level of coordination. Results management: Public management for results- Figure 1: Aid Architecture Features based development requires strategic visioning at the low aid dependency institutional level, as well as solid and detailed planning, implementation and M&E at the technical level. Results management of external assistance should rest on the governments development vision or strategy and inform national and government-led results monitoring. At the technical level, it should correspond to the governments expenditure framework to plan and monitor and evaluate the use of public development resources. crisis Policy and budget cycles: Aid coordination mechanisms should correspond to and be aligned with national development results monitoring cycle(s), which ideally stable feeds into the national budget cycle in time to inform annual deliberation/approval of the national budget in parliament. Multi-year planning frameworks need to respect the governments mandate period. Annual benchmarks for M&E should serve to inform deliberation of the national budget in parliament. Transparency and accountability: Transparency in the use of public resources enables the public to measure the high aid dependency governments performance and to hold it accountable for achieving development results. To facilitate domestic accountability on the use of public resources, donors need to be accountable to governments on their assistance in the same way that governments need to render accounts to donors on the utilization of these resources. To improve this mutual accountability, aid coordination should be underpinned by transparent governmental aid information management, which will also enable the governments domestic accountability on development resources to its citizens. This can be facilitated by the use of web-based Aid Information Management System (AIMS). While each country context is unique, some context types can be distinguished that result in common features of the country-level aid architecture. Most notably, aid dependence ratios5 impact the type and structure of the country-level aid architecture, and so do the particularities of post-crisis settings: High aid dependence ratio: Central government expenditure is highly dependent on ODA. As a function of the degree of aid dependence, there is a progressive penetration of the donor community in key areas of public management, both at the macroeconomic level and with regard to core state services. Low aid dependence ratio: Aid received has a low impact on central government expenditure, but is of potentially great importance to capacity development in strategic areas of national development plans. The recipient government is in a position of greater national autonomy, advocating that international cooperation should complement other resources available for development. Post-conflict setting: In the aftermath of violent conflict, development planning is short-term as long as political power brokerage continues and the institutional setting remains volatile. Often, international assistance is framed by the engagement of an international peace-keeping force, peacebuilding dialogue and related funding mechanisms.
Aid dependency ratios can be calculated using ODA as a percentage of gross national income, gross capital formation, imports of goods and services or government expenditure. See World Development Indicators, Open Data Catalogue, World Bank. This guidance note uses ODA as a percentage of government expenditure to emphasize the national public finance aspect. Ratios can be as low as 1% or fewer (e.g. South Africa, Thailand, Uruguay and others) and reach over 100% in the most aid dependent countries (e.g. Afghanistan, Burkina Faso, Cambodia (until 2005) and others).
Post-disaster setting: Development planning for the affected area(s) is mostly short-term to respond to the needs of recovery and reconstruction in the aftermath of crisis. The country receives large volumes of humanitarian assistance, which are usually channelled outside of country systems.
Results management
Since PRSPs are a requirement for the HIPC Initiative and the MDRI, multi-year national development strategies remain particularly relevant for countries with high volumes of aid where such strategies form the basis of engagement with external partners.7 Ideally, the governments strategic vision and development strategies translate into detailed expenditure frameworks that are used to manage and allocate public resources by sector. In practice, however, national budgets are often organized and voted upon along the lines of governmental administrative units rather than according to the sectors of the national planning framework particularly in countries with high volumes of ODA and in fragile settings where donor pressure deviates the substance of national planning frameworks away from government priorities for public spending.
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This is often the case for sectors that are priority intervention areas for development partners, such as governance, anti-corruption, security sector reform, early recovery and others. The notion that multi-year development strategies are a precondition to effective development management is also reflected in the ownership indicator of the PD, which measures the percentage of programme countries with operational development strategies.
UNDP can support the government to relate aid coordination mechanisms to national expenditure frameworks and inform national M&E systems that are used to prepare and implement the national budget. While it is important that such frameworks relate to national strategic visioning or planning exercises, aid coordination mechanisms need to more closely relate to the as is situation of public financial management than to the should be framework. Beyond support to aid coordination mechanisms, UNDP can support the government in better linking strategic visioning exercises with actual expenditure frameworks or in defining better sector strategies that are linked to the budget, when such support is requested by government. UNDP should coordinate this support with other development partners that are providing assistance to improving public expenditure frameworks. At the same time, government-led development results management and M&E is more usefully done for specific sectors or reform programmes rather than at the national level. The pressure for aggregate multi-year results monitoring of national development strategies comes from external conditionalities and donor reporting requirements, even though results monitoring in donor countries themselves is usually sector-specific. Aid coordination mechanisms should reinforce donors coordinated support towards national statistical capacities and M&E systems, to which the donor communitys own M&E of external assistance should be progressively aligned.
The European Union (EU) has established a code of conduct for EU donors to that effect: EU Code of Conduct on Complementarity and Division of Labour in Development Policy, see the EU Toolkit for the Implementation of Complementarity and Division of Labour in Development Policy. Even though the AAA highlights that developing countries will lead in determining the optimal roles of donors in supporting their development efforts at national, regional and sectoral levels (AAA, para. 17.a), division of labour exercises at country level are often donor-driven.
national aid policy with specific performance targets for individual donors and recipient agencies; 2) a monitoring process at the highest political level and with strong recipient government leadership; 3) the inclusion of parliaments and civil society and independent analytical inputs; 4) comprehensive databases that cover aid quality issues; and 5) peer pressure among providers.10 Beyond support for the elaboration of a national aid policy and for strengthening national M&E systems, UNDP can support the government in implementing AIMS. Many governments have found AIMS useful to manage their aid flows, improve the overall alignment of assistance with country priorities and facilitate reflecting international aid flows in national budgets. Such software applications enable governments to record and process information about development activities and related aid flows, even when they are channelled outside of the governments treasury. AIMS are usually web-based and rely on the governments development partners to enter data on their assistance. A government-led aid coordination mechanism can serve as the institutional framework to ensure regular and accurate data entry. Information on the use of external development resources should also be made available publicly.11 In countries in which parliamentary oversight of the national budget is generally weak, assistance could be tied in with more general support to government for the production of transparent and detailed information on public resources.
10 11 12 13
See www.un.org/en/ecosoc/newfunct/pdf/ma_study-status_and_progress.pdf. See Asia-Pacific Aid Effectiveness Portal (2009), Better Data, Better Aid? Practical Guidance Note on Aid Information Management Systems, UNDP. UNDP country offices that have been solicited to provide capacity development support to emerging assistance providers can consult the draft UNDP Guidance Note on Capacity Development for Southern Providers of Development Cooperation. FRIDE (2009), Implementing Paris and Accra: Towards a Regional Agenda in Latin America and the Caribbean, Development in Context, No. 18, January.
Coordination structures should correspond to already existing intra-governmental or inter-institutional coordination structures, so that they do not represent an additional burden to the personnels workload. Whenever aid coordination structures include state institutions outside of government such as parliament or the supreme court, the coordination structure needs to be in conformity with the mandate of the institution (constitutional provision or by decree). UNDP can support national and local authorities to strengthen the potential for mutual learning and cross-fertilization among multilateral, national and local institutions, and decentralized cooperation networks. This will enable national and local authorities to better address cross-cutting issues and bottlenecks related to development, multiple levels of action, shared programming among different actors, demand-driven cooperation and territorialization of the MDGs. In recent years, UNDP has involved decentralized cooperation territorial stakeholders, both in the North and the South, to cooperate and contribute to the multilateral framework through its ART Initiative. ART programmes in different countries use this multi-level, multilateral approach by including representatives from local governments, decentralized cooperation partners, relevant academic institutions and other territorial stakeholders in the programmes steering committees. By providing this kind of support, UNDP can contribute to enhancing the impact of decentralized cooperation and support better alignment with wider development processes.14
Results management
In middle income countries with low volumes of aid, explicit multi-year development strategies are less common than in aiddependent countries. Overall, strategic visioning is more likely to be expressed in governmental or ruling party manifestos. At the same time, more capacity exists to formulate and monitor sector-specific strategies. Even though the international community is less engaged in public management when aid dependence is low, many middle income countries actively look for support and opportunities for peer learning to modernize state functioning and effectiveness. ODA can have a catalytic effect in this regard, when resources are directed towards strengthening internal capacities for results management. UNDP can support the government and national counterparts to strengthen national capacities for sector- or institution-specific goal and target setting, as well as M&E. At the same time, middle income countries often have substantial existing national statistical capacities and M&E systems, within state institutions and beyond. While national statistics institutions might not necessarily focus on M&E areas considered essential by donors, sound statistical information will help the government and donors to monitor progress towards the targets of sectoral results frameworks. UNDP should support the government in harnessing donor support for national statistical and M&E capacities and encourage South-South partnerships and peer learning in this regard. It should also encourage a pluralistic view on national statistical and M&E capacities, in which institutions of the state build on and complement statistical work of universities, research institutes, think tanks and NGOs.
the public sector in middle income countries. They serve as showcases to encourage inclusive discussions and stakeholder engagement, including parliamentary oversight, on issues of transparency and domestic accountability.
15
See the OECD DACs Principles for Good International Engagement in Fragile States and Situations.
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coordination mechanisms for all development-related matters beyond humanitarian aid and security-related issues. External support for security sector reform, stability and state-building should be organized along the lines of intra-governmental and territorial (national-provincial-local) divisions of labour, at least at the technical level. If doubts about the legitimacy of government continue to persist, external support and corresponding coordination can be structured around state institutions and non-state actors beyond government. For example, support may be channelled to the Supreme Court, Parliament, an Independent Electoral Commission, a National Ombudsperson or similar institutions. Support to civil society organizations or the media, for example, can be coordinated with national representative bodies, such as a national platform of civil society organizations, a national media council or association.
Results management
In post-conflict settings, international and national actors increasingly use post-conflict needs assessments (PCNAs) as an entry point for conceptualizing, negotiating and financing a common shared strategy for recovery and development. PCNAs are multilateral exercises undertaken by the United Nations, World Bank, regional development banks and international partners, in collaboration with the national government. Based on such assessments, transitional results frameworks or action plans define key milestones in identified areas. Such frameworks and action plans tend to focus on short-term results, although they may be conceptually linked to expected medium- and long-term efforts. These frameworks promote the use of outcome indicators and monitorable targets as management tools for strategic planning and implementation monitoring and as an umbrella for donor coordination.16 PCNAs are useful exercises to coordinate and rally support around a commonly elaborated strategy for recovery and development. Given that many actors with different objectives engage in the elaboration of PCNAs, UNDP can support and advocate for the inclusion of national counterparts, but it should also caution external partners to have realistic expectations with regard to national capacities for planning, implementing and M&E. Whenever planning and M&E serve primarily to respond to donor requirements on the use of funds, external partners should not overburden national counterparts with such tasks. Instead, external partners should explicitly focus on investing in national capacity development for planning and M&E. Such capacity development is likely to be a longer term exercise and donors will need to find intermediate solutions to respond to their reporting and M&E needs.
See United Nations / World Bank (2007): Joint Guidance Note on Integrated Recover Planning Using Post-Conflict Needs Assessments and Transitional Results Frameworks.
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UNDP can support national authorities to conceptualise AIMS as an instrument that establishes clear linkages to public financial management in order to facilitate the transition from humanitarian to government-led aid information management. Even in a postconflict and fragile setting, the imperatives of humanitarian aid coordination should not determine the conceptualization and establishment of a government-led AIMS. Existing global financial tracking should respond to this demand of providing timely information on humanitarian aid. While it is crucial that humanitarian and peacebuilding actors receive fast and reliable information on resources available, UNDP considers it essential that recipient governments are empowered to manage available aid information and progressively (re-)assume the leadership in planning and implementing programmes that will deliver on national development priorities. Linking PCNA exercises to governmental priority setting and institutional capacity building can serve as a stepping stone in that direction.
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frameworks, UNDP should support the government in developing flexible structures that allow for progressive alignment of aid coordination structures to the different stages of the commissions exit strategy. UNDP strives to support the strengthening of the governments institutional, financial and technical capacity to manage the recovery process. As in other contexts, aid coordination structures should be modelled along the lines of intra-governmental coordination and institutional divisions of responsibility. When the international community opts for pooled funding mechanisms to accompany the transition, the governance arrangements of such funds should correspond with the division of competencies within government and within the state. If the governance arrangements of pooled funding mechanisms differ substantially from the national division of competencies, it will be difficult to progressively increase the involvement of national counterparts as capacities improve.
Results management
Similarly to the use of post-conflict needs assessments and transitional results matrixes in post-conflict settings, international and national stakeholders are increasingly relying on post-disaster needs assessments and recovery frameworks to facilitate aid coordination and results management in the wake of disaster. These tools aim to harmonize the assessment, analysis and prioritization of damages, losses and needs by a range of international stakeholders in support of the national government. A PDNA is a government-led exercise, with integrated support from the United Nations, World Bank, European Commission and other national and international actors. It pulls together information in a single, consolidated report - information on the physical impact of a disaster, the economic value of the damages and losses, the human impact as experienced by the affected population and the resulting early and long-term recovery needs and priorities. UNDP can support national ownership of PDNAs and associated recovery frameworks, which serve as a useful planning and coordination framework for a multi-stakeholder recovery strategy, by identifying prioritized benchmarks, outcomes and desired results to repair and restore social, physical, institutional and economic systems. At the same time, UNDP can support national counterparts in cautioning international partners to avoid the use of artificial performance measures that divert attention from real and dynamic strategic imperatives of emergency reconstruction. International donors can rightfully demand reasonable fiduciary oversight, but UNDP should support governments in resisting excessive restrictions on emergency relief fund management. Such overly restrictive relief fund management risks inhibiting effective emergency relief in situations when limited information, emergency demand and the politics of the operating environment require quick and proactive field operations.
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balance between a focus on the donor community's coordination and information-sharing needs and a much needed investment to strengthen government capacity for aid information management.
Lessons learnt
Ownership and capacity development are necessary preconditions for sustainable development.
Development cooperation can have a catalytic effect on national development, but it must be careful to avoid replacing national ownership and leadership of a countrys development process. It is critical that development assistance supports governments, societies, organizations and individuals to obtain, strengthen and maintain the capabilities to set and achieve their own development objectives over time. ODA remains an important financial vehicle for development, not as a panacea, but as an important complement to other sources of financing available to developing countries. While remaining crucial in post-crisis countries and least developed countries, ODA has the potential, particularly in lower and mid-level middle income countries, to leverage larger amounts of domestic and foreign capital for development. ODA has the potential to be a catalyst, through strengthened country capacities and responses, to stimulate inclusive growth, productive public and private investments and to tackle persistent and area-based poverty. Ownership over this process hinges heavily on a countrys capacity to drive and negotiate their own development strategies and financing arrangements, including the coordination and management of aid.
External assistance is just one element of the national public resources of a recipient country.
For the sake of development effectiveness, aid coordination mechanisms need to underpin and contribute to the coordination of national public resources. Coordination of external partners around issues for which no national institution, ministry, department or agency can be held accountable runs the risk of being dissociated from national development management. External partners can lobby and encourage the government to focus on particular priority areas that they consider necessary for sustainable development. If advocacy results in the creation or strengthening of a governmental or state entity in charge of (and with a budget for) the sector in question, the aid coordination mechanism can be remodelled to include this entity. In the meantime, aid coordination structures should be government-led and reflect the existing structures of intra-governmental coordination and public expenditure management. This does not pre-empt the donor community to coordinate among each other on issues, independent from public management, such as support to civil society or the media, for example.
Genuine partnerships are a precondition for the effective use of all development resources.
Global partnerships are about promoting effective and equal partnerships between countries, including stakeholders such as parliaments, civil society, local governments and the private sector. As the global development landscape incorporates an evergrowing number of providers of development cooperation, coherence and consistency among the activities of various actors cannot be ensured any longer by means of coordination meetings alone. Measures to improve transparency and accountability of development cooperation providers and recipients for their activities become imperative to enable concrete collaboration and division of responsibilities.
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RCs Office
UNDP programme staff (economists, aid effectiveness specialists, technical advisors, programme specialists, etc.) advise and support the government (usually the Ministry of Finance, the Ministry of Planning or similar units) on issues related to aid coordination and effectiveness. The RCs Office, on the other hand, is responsible for improving the performance of United Nations agencies, funds and programmes support to the country. For this purpose, the United Nations Development Group (UNDG) created a toolkit for improved functioning of the United Nations development system at country level. The toolkit provides a comprehensive structure to support countries in planning and implementing the change effort required to improve development impact and increase efficiency of the United Nations development system.18 In some countries, the United Nations RC also takes on the role of chair or co-chair of donor/government aid coordination groups. While this is a crucial function to facilitate harmonization and donor alignment with national development objectives, it should nevertheless be accompanied by targeted support to national capacity development for aid coordination and management. Sound and coherent aid coordination on the part of donors (even if facilitated by the United Nations) cannot substitute national engagement, ownership and leadership of the development process.
17 18
See UNDG Programming Reference Guide. See UNDG Toolkit for Improved Functioning of the United Nations Development System at the Country Level.
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Capacity development UNDG, Position Statement on Capacity Development, December 2006. UNDP Presentation, Overview of UNDPs Approach to Supporting Capacity Development, August 2008. UNDP, Frequently Asked Questions: The UNDP Approach to Supporting Capacity Development, June 2009. UNDP, Practice Note on Capacity Assessment, October 2008. Public financial management and accountability Overseas Development Institute (ODI): Centre for Aid & Public Expenditure (CAPE) Oxford Policy Management (OPM): Public Financial Management The World Bank: Public Finance Center on International Cooperation (CIC): Public Finance and Economic Recovery Project The International Consortium on Governmental Financial Management (ICGFM) The OECD DAC processes The Rome Declaration on Harmonisation, February 2003. The Paris Declaration on Aid Effectiveness, 2005. The Accra Agenda for Action, 2008. 2006 Survey on Monitoring the Paris Declaration 2008 Survey on Monitoring the Paris Declaration OECD DAC, Aid Effectiveness: A Progress Report on Implementing the Paris Declaration, Better Aid Series, 2009. OECD DAC, Managing Aid: Practices of DAC Member Countries, Better Aid Series, 2009.
United Nations Financing for Development and Development Cooperation Forum Monterrey Consensus on Financing for Development, 2002. Doha Declaration on Financing for Development, 2008. Report of the First Development Cooperation Forum, 2008. World Summit Outcome, 2005. World Summit Outcome, 2010. ECOSOC, Enhancing Mutual Accountability and Transparency in Development Cooperation, Background Study for the Development Cooperation Forum High-Level Symposium, November 2009. United Nations, Trends and Progress in International Development Cooperation, Report of the Secretary-General, E/2010/93, June 2010.
Role of the United Nations Development Group United Nations, Triennial comprehensive policy review of operational activities for development of the United Nations, 2004/5. United Nations, Triennial comprehensive policy review of operational activities for development of the United Nations, 2007. Report of the Secretary General, Follow-up to and implementation of the outcome of the International Conference on Financing for Development, 10 August 2007.
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Results management
Detailed government-led development results management and M&E should be done by sector and/or programme. National expenditure frameworks should be informed by national strategic visions and/or plans. Aid coordination mechanisms should serve to reinforce donors support of national statistical capacities and M&E systems.
ODA can have a catalytic effect for peer learning to modernize state functioning and effectiveness, when resources are directed towards strengthening internal capacities for results management. External partners should encourage South-South partnerships and peer learning to strengthen existing national statistical capacities and M&E systems, both within governmental and state institutions and beyond.
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National multi-year development strategies need to be cognizant of the governments incumbency period and flexible enough, including in resource allocation predictions, to adapt if a change of government takes place. A national aid policy, strategy or action plan can be a useful tool for governments to localize the international aid effectiveness agenda and to coordinate external support around national priorities, strategies, cycles and processes. AIMS are useful to manage aid flows and monitor aid quality, improve the overall alignment of assistance with country priorities and facilitate reflecting international aid flows in national budgets. Governments can enhance mutual accountability through a national aid policy with specific performance targets, a monitoring process with strong government leadership and the inclusion of parliaments and civil society and independent analytical inputs.
Institution-specific support needs to conform to the mandate period of the institution if different from the governments mandate period. Since aid coordination is more likely to take place at the sector and/or institutional level, each institution, ministry, department, or agency needs to ensure that results-monitoring and benchmarking inform national deliberations in parliament, where appropriate. Aid information management can be a part of integrated financial information management systems, which should include (linkages to) debt information management. Aid and debt information management can serve as showcases to encourage inclusive discussions and stakeholder engagement, including parliamentary oversight, on issues of transparency and domestic accountability.
Aid coordination mechanisms should conform to transitional policy cycles, which are usually determined by pre-negotiated short-term objectives with specific priority issue areas. Aid coordination mechanisms during a political transition period should be flexible and light in structure and will need to be overhauled at the end of the transition period.
Coordination of international support to post-disaster recovery should be sufficiently flexible to allow for changes and adjustments in response to newly emerging opportunities, which might not have been foreseen in advance but which enable accelerated progress towards recovery.
AIMS should be conceptualised as an instrument that establishes clear linkages to public financial management in order to strengthen national capacities for public financial management and to facilitate the transition from humanitarian to government-led aid information management. Linking PCNA exercises to governmental priority setting and institutional capacity building can empower governments to manage available aid information and progressively (re-)assume leadership in planning and implementing programmes which will deliver on national development priorities.
During the immediate emergency response period, the international community might assume certain responsibilities for aid information management at country level, for the sake of providing relief actors, government, parliament and the larger public with much needed information on incoming aid flows. Nonetheless, this should be done with a view to eventually transition to government-led coordination and management, as soon as adequate structures are in place to assume this task.
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Annex 2: Checklist of elements to consider when supporting the reform of aid coordination mechanisms
Country: Initiative manager: Government entity: Consultant/reviewer: Review date:
Background [Replace this text with a brief description of how the initiative originated] Objectives Yes 1. Establish a forum for policy discussion on national/sector strategies and priorities No Comments [Replace this text with the objectives of this initiative.] 2. Mobilize additional resources for the national development strategy (and/or selected sector strategies) 3. Create a forum for mutual accountability: progress review and agreement on joint benchmarks/objectives and partnership mechanisms 4. Other (e.g. is it a national or theme/sector-specific initiative?) Development results (apply to national and sector level) Yes 1. Is there a single medium-term development strategy? No Comments [Replace this text with details.] 2. Is it results-based and MDG-based? 3. Does the strategy include a results matrix based on the countrys national development strategy (PRSP, etc.) and that broadly encapsulates measurable growth and poverty reduction outcomes in the country? 4. Does the strategy include a monitoring matrix with a limited number of MDGbased targets, SMART indicators and sources of verification? 5. Does the strategy clarify implementation issues, including resource requirements as well as capacity assessment and capacity development plans with defined indicators or progress benchmarks and are resources allocated for this purpose?
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6. Does the strategy include a mutual accountability framework based on mutually agreed systematic country and donor performance assessments (benchmarks), with periodic assessments by independent observers? 7. Has the strategy been developed in a participatory manner, including inputs from civil society, parliament and the private sector? 8. Other Development resources (apply to national and sector level) Yes 1. Is there a costing of the development strategy, including at least one scenario based on current resources and one scenario based on needs to achieve the MDGs? 2. Is the costing sufficiently detailed (i.e. with concrete priority actions and investments identified and costed)? 3. Is there a mapping of current aid allocations against costed targets (by donor, based on existing donor pledges and engagements)? 4. Is there a resource matrix overlaid on the country results matrix that clearly identifies the activities and financial support that aid partners are committing to and disbursing against, in each of the monitored areas? 5. Is there an in-depth analysis of ways to enlarge fiscal space, by identifying fiscal and macro-economic potential for growth? 6. Is there a Medium Term Expenditure Framework, taking into account both national and existing external resources? 7. Are global funds and programmes, NGOs and private foundations included when discussing external resources? 8. Is there a link to country budgetary cycle and domestic accountability processes to include active participation by representatives of parliament, civil society and media in the coordination mechanism? 9. Other Partnership 1: Regular coordination mechanisms (apply to national and sector level) Yes 1. Is there a functioning coordination mechanism between the government and donors on development results and aid effectiveness issues? (i.e. regular meetings several times a year, with senior representatives of ministries/agencies and heads of donor cooperation agencies in country) 2. Is the coordination mechanism chaired and led by the government? 3. Is there a functioning government mechanism, allowing for inter-ministerial coordination on aid management issues? No Comments No Comments
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4. Does the coordination mechanism include appropriate participation from civil society, private sector, parliamentarians? 5. Is there a clear policy and/or procedures on aid allocation/management, applicable to all donors? 6. Is the coordination structure used for results-based monitoring (based on targets set in the development strategy) and mutual accountability (under national aid management policy/procedures)? 7. Other Partnership 2: Key elements to overhaul traditional Consultative Groups / Roundtables results and create results and resources partnerships Yes 1. Is the mechanism prepared under government leadership and chaired by the government? 2. Does the mechanism include appropriate representation of civil society, private sector and parliamentarians? 3. Is there a specific engagement and communication strategy to ensure that all stakeholders are involved as appropriate, including emerging and non-OECD DAC donors? 4. Does the mechanism build on and improve existing mechanisms and systems in the country? 5. If the mechanism does not build on existing, regular coordination mechanisms, are there plans to discuss a government position paper/policy on the establishment of such aid management and partnership mechanisms? 6. If the mechanism does not build on existing, regular coordination mechanisms, is there a framework for preparatory activities, with appropriate benchmarks and timelines? 7. Does the mechanism focus on resources and managing for results, shifting towards performance and programme budgeting? 8. Is appropriate time allocated (at least 30%) to review aid effectiveness, implementation and partnership issues, based on a mutually-agreed national action plan and benchmarks for aid effectiveness? (implementation of the PD) 9. Is sufficient attention being paid to capacity issues, with costed capacitydevelopment plans, based on capacity assessments and clear benchmarks? 10. Is sufficient attention being paid to cross-cutting issues (gender, environment, human rights, HIV/AIDS)? No Comments
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11. Is there an appropriate monitoring instrument (aid management system) to monitor aid flows, impact and predictability, establish linkages with the national budget process and ensure transparency and accountability of resource management? 12. Are appropriate procedures in place for aid management and informationsharing, with a particular focus on ensuring predictability of aid, with multi-annual commitments? 13. Other
General observations
[Replace this text with information regarding the overall readiness of the initiative. This must be filled in by the manager.]
Comments
[Replace this text with comments.]
Approvals
Initiating entity: Initiative manager: Technical manager: Consultant: Reviewer: ___________________________ ___________________________ ___________________________ ___________________________ ___________________________ Date: ___/___/____ Date: ___/___/____ Date: ___/___/____ Date: ___/___/____
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Acknowledgements: This guidance note is a technical document of UNDP staff and does not represent an official position of UNDP or its Executive Board. The note builds on the draft Compendium of Needs Identified, Lessons Learnt and Good Practices on Capacity Development and Aid Effectiveness (April 2008) and on the draft Technical Note on Consultative Groups and Roundtables (March 2007). It complements the existing Checklist of Elements to be Considered when Reforming Aid Coordination Mechanisms and has been shared with practitioners and colleagues for review. A discussion draft of this note was widely shared amongst practitioners for review in November/December 2010. We wish to thank the following colleagues for their comments and feedback: Gert Danielsen, Artemy Izmestiev, Jennifer Moreau, Astrid Schnitzer, Daa ilovi, Tuija Rytkonen and Mark van den Boogaard. We would also like to thank Julia Steward for her thorough and conscientious copy-editing of the manuscript. Contact information: Bettina Woll, Aid Modalities Specialist, Capacity Development Group, Bureau for Development Policy, UNDP, [email protected]. For more information: www.undp.org/capacity/aid.shtml and www.aideffectiveness.org United Nations Development Programme One United Nations Plaza New York, NY 10017 USA Aid Coordination Mechanisms 23 UNDP Support to Country Level