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New directions in the quality of aiddebate:
Implications for support to Public FinancialManagement
tephen Groff eputy Director
-Development Co operation Directorate
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3
Change ….? Why Change?
’
It s about making aid work better where it is needed
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A Day in the Life of…
Source Don De Savi n & COHRED
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Contra-
ceptives and
RH
equipment
STI
Drugs
Essential
Drugs
Vaccines
and
Vitamin A
TB/Leprosy
Blood
Safety
Reagents
(inc. HIV
tests)
D
F
I
D
K
f
W
UNICEF
J
I
C
A
GOK, WB/
IDA
Source of
funds for
commodities
Commodity
Type(colour coded) MOH
Equip-
ment
Point of first
warehousingKEMSA Central Warehouse
KEMSA
Regional
Depots
Organization
responsible
for d elivery to
district levels
KEMSA and KEMSA Regional Depots
(essential drugs, malaria drugs,
consumable supplies)
Procurement
Agent/BodyCrownAgents
Government
of Kenya
GOK
GTZ(procurement
implementation
unit)
JSI/DELIVER/KEMSA Logistics
Management Unit (contraceptives,
condoms, STI kits, HIV test kits, TBdrugs, RH equipment etc)
E
U
K
f
W
UNICEF
KEPI Cold
Store
KEPI(vaccines
andvitamin A)
Malaria
U
S
A
I
D
U
S
A
I
D
U
N
F
P
A
E
U
R
O
P
A
Condoms
for STI/
HIV/AIDS
prevention
C
I
D
A
U
N
F
P
A
US
Gov
C
D
C
NPHLS store
MEDS(toMission
facilities)
Private
Drug
Source
G
D
F
Government
NGO/Private
Bilateral Donor
Multilateral Donor
World Bank Loan
Organization Key
Japanese
Private
Company
W
H
O
GAVI
S
I
D
A
NLTP(TB/
Leprosydrugs
Commodity Logistics System in Kenya (as of April 2004)Constructed and produced by Steve Kinzett, JS I/Kenya - please communicate
any inaccuracies to [email protected] or telephone 2727210
Anti-
Retro
Virals
(ARVs)
Labor-
atory
supp-
lies
Global
Fund for
AIDS, TB
and Malaria
The
"Consortium"
(Crown Agents,
GTZ, JSI and
KEMSA)
B
T
C
MEDS
DA
NID
A
Mainly District level staff: DPHO, DPHN, DTLP, DASCO, DPHO, etc or staff from the Health Centres,
Dispensaries come up and collect from the District level
MEDS
Provincial andDistrict
HospitalLaboratory
Staff
Organizationresponsible for
delivery to sub-district levels
K
N
C
V
MSF
MSF
Ministry of Health: Kenya
( )Kinzett 2004
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The Aid Quality
Journey…
ome eclaration n
Harmonisation
ccra ActionAgenda
usan–9 Nov
Dec 2011
2002
onterrey onsensus
2003 2005 2008 2010 2011
HLF-1
HLF-2
aris
eclaration n AidEffectivenes
s
ogota eclaration on
SSC
ili
eclaration on ragile States
stanbul rinciples on
SO effectivenessHLF-3
HLF-4
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The aris Declaration“ ”yramid
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:aris Declaration what makes itdifferent?
§§
§ ;Unprecedented consensus
§ -56 action oriented commitments for both Donors and Partners
;countries
§ -Built in mechanism for
monitoring progress at country(and global levels 12
);Indicators and
§ Targets set for 2010 monitored
( -in 3 separate surveys 2005).2011
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Outline
I. The Aid Quality Agenda andCommitments
II.Assessing Progress
III.Paris Declaration Commitments onPFM
IV.New Actors and New Themes
V.High Level Forum on AidEffectiveness: Implications for thefuture Aid Quality Agenda
P k
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Progress on track 2005-2008
%6
%9
%8
T i i ff
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Targets requiring effortsbut within reach (2005-2008))
49%
1483
45%
36%
59%
88%
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very special efforts (2005-
2008))
9%
22% (No progress)
49%
1483
45%
36%
59%
88%
43%
42%
42% (slippage)
20%
44%
22%
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Outline
I. The Aid Quality Agenda andCommitments
II.Assessing Progress
III.Paris Declaration Commitmentson PFM: Key Messages
IV.New Actors and New Themes
V.High Level Forum on AidEffectiveness: Implications for thefuture Aid Quality Agenda
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Total donor PFM support, 1995-2008
Evaluation of Donor Support to PFM Reform in Developing Countries,ODI, 2010
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Paris Declaration and PFM
DONORS committed to:
ü Provide reliable commitments of aid over a multi-year framework
ü Disburse aid in a timely and predictable way
ü Rely on transparent partner government budget and accountingmechanisms
ü Adopt harmonised performance assessment frameworks
PARTNER COUNTRIES committed to:
ü Publish timely, transparent and reliable reporting on budgetexecution
ü Ensure that national systems are effective, accountable, andtransparent
ü Take leadership of the public financial management reform process
ü Mobilise domestic resources, strengthen fiscal sustainability
ü Create an enabling environment for public and private investments
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Evidence on PFM: Mixed
%9
1483
%5
%6
%9
%8
%5
%3
%7
%1
%4
%
%6
%4
ACCRA AGENDA FOR ACTION
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ACCRA AGENDA FOR ACTION:Commitments on PFM (2008)
DONORS will:
– Use country systems [including PFM systems] as the first option in the public sector.
– Be transparent when they don’t use them.
– Support country-led reform programmes.
– Develop corporate plans for using country systems.
– Channel 50% (or more) of government-to-government aid through country fiduciarysystems (i.e. PFM + Procurement)
PARTNERS will:
- lead in defining reform programmes.
- Strengthen their budget planning processes
- Facilitate parliamentary oversight including through more transparency in PFM
PARTNERS & DONORS will jointly assess quality of country systems.
Wh t th diff t
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What are the differentcomponents of the
PFM system that aid can “use”?
: ( )Source Mokoro 2010
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Implementation
§ Many factors lead to donors bypassingcountry PFM systems
§ Varying perceptions of risk
• Emphasis on fiduciary risk
• Developmental risk of not using country systems
§ Incentives and capacities in donororganisations
§ Political constraints: visibility, traceability...
§ Quality of partner country systems
§ Shifting transaction costs from partnergovernment to donor
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Some common myths
§ Using country systems means providingbudget support
• Not necessarily: all aid modalities can makeuse of country systems
§ An “all or nothing” approach?• Different components of country systems
can be used
§ Pooled funds are a move towards use of
national systems
• They might be, but this is more aboutharmonisation
§ Technical co-operation cannot make use of country systems
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Working Party on Aid Effectivenesssupport to PFM
§ Assessing progress (Quality and Use of PFM Systems)
§ Global Partnership on CountrySystems
• Dedicated Task Forces on PFM andProcurement
• Identifying and disseminating good practice
• Developing and supporting common tools(e.g. procurement assessment)
§ Country Level Work
• Lending political support, monitoring,
sharing experiences
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Outline
I. The Aid Quality Agenda andCommitments
II.Assessing Progress
III.Paris Declaration Commitments onPFM
IV.New Actors and New Themes
V.High Level Forum on AidEffectiveness: Implications for thefuture Aid Quality Agenda
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Broadening the Partnership§ Shaping the global development architecture – i.e. G20
Development Consensus
§ G20 discourse (June 2010) on the need for greatertransparency, accountability and institutionalgovernance including use of country systems
§ Development actors beyond the DAC:
• Non-traditional providers of developmentassistance (i.e. Middle Income Countries,Emerging Economies, Arab donors etc)
• Civil society organisations• For-profit private sector and foundations
§ Bridging the divide: DAC Statement on “NewPartnerships”, Bogota Statement on South South
Cooperation
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Objectives of Broadening thePartnership
§ Finding convergence and common ground§ Share lessons on economic growth, poverty
reduction and development co-operation
§ Mutual interest in achieving results whilerespecting diverse ways to reach them
§ Interest in improving all forms of co-operationthrough inclusive dialogue, mutual
learning and knowledge-sharing§ Recall the enduring relevance of the Paris
principles for developing countries (fragile
states, MICs, LDCs)
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New Themes
§Climate Change Financing
• Avoid pitfalls of complex funding channels
§ Public Private Partnerships
• Strengthening regulatory and financialenvironments
• Risk Management
§ Innovative Financing Mechanisms• Additionality
• Predictability
§ Aid as Catalyst towards more Effective
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Outline
I. The Aid Quality Agenda andCommitments
II.Assessing Progress
III.Paris Declaration Commitments onPFM
IV.New Actors and New Themes
V.High Level Forum on AidEffectiveness: Implications forthe future Aid Quality Agenda
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27
Where are we now?
onterrey onsensus
( )002
ome HLF onHarmonisati
( )n 2003
ccra Agenda or Action( )008
ogotaStatemen
on SSC( )010
aris eclaration
n Aid
Effectivene( )s 2005
iliDeclaration
n fragile( )tates 2010
orea(LF 29
. –ov 1
.ec )011
g eve orum on
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g eve orum onEffectiveness: A Unique
Opportunity
Forging a new consensus on aid and development?
• Chance to reinvigorate the globalcommitment towards the MDGs;
• Refresh and reaffirm Paris / Accraprinciples;
• Recognise the role of aid as contributorand catalyst for development results
and effectiveness;
• Improve the quality of partnershipsthrough embracing partner countryleadership, diversity and mutual respect;
• Seek convergence based on
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Who? Where? When?
§A political event that attractsministerial attendance, with decisiveoutcomes
§ Busan, Korea. Host: Government of Korea
§ 29 November to 1 December 2011.
§
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HLF-4- Main Objectives
§ Stocktaking from the Paris / Accraprocess
§ Agreeing on features of high quality aid
and its monitoring framework towards2015
§ Situating aid in its broader
development context:• More actors, development finance
effectiveness
• Diversified approach: MICs, LICs, FS,
E i A f P li i l
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Emerging Areas for PoliticalOutcomes
qResults and transparency for betteraccountability
qOwnership and Leadership
qEffective States and Alignment(Country Systems)
qDiversity at country level – fragilestates, middle income countries,
LDCsqClimate Change Financing
qRecognise all forms of partnerships
(SSC, PPPs…)
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www.oecd.org/dac/effectivene
WWW.BUSANHLF4.ORG
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Do donors use yourcountry systems?
1 2 3
31
44
25
1. Yes
2.No3.Sometimes
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Does your country refuseaid because of complexdonor requirements?
1 2 3
4
4749
.1 Ye s
.2 N o
.3 S o m e tim e s
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Is aid effective in yourcountry?
1 2 3
19
48
33
1. Yes
2.No
3.Sometimes