Sector-wide approaches [SWAps] in health: an overview

Tom Merrick, World Bank Institute

Objective & issues to address:

Objective: provide an overview of SWAps

Issues to address: Emergence & popularity of SWAps What SWAps are, their core elements Readiness criteria for SWAps SWAp financing options Advantages & disadvantages of

SWAps

Why emergence, popularity of SWAps

Three key sets of underlying reasons: shift in macro-economic dialogue

from SAPs to public expenditure management

recognized need to ‘reform aid’

opportunities provided by sector reform programs

Why reform aid?Problems with ‘project modality’ :

• Distortion of sectoral policies & budgets

• Minimal national ownership

• Undermining existing national systems

• Burden on recipient governments

• High operating/transaction costs

• Inflexibility; one size fits all

• Varying standards of service provision

Objectives SWAp is expected to achieve

Address fundamental issues/problems of ‘project aid’ modality

Increase aid effectiveness Restore ideal DCG/donor relationships Establish greater coherence between

policies, programmes and budgets Demonstrate ‘programme approach’ Scale-up positive lessons learned

What then is SWAp?

Various definitions; new concept; understanding still evolving

aid coordination mechanism; aid modality

way of managing development assistance

partnership between govt. & donors approach to sectoral development integrated national programme for

policy reform in a sector, SDP (UNICEF)

Common definition A method of working b/w govt & DPs All significant funding for the sector supports a

single policy and expenditure program Govt. provides leadership Common management approaches applied

across the sector by all partners Programme progresses towards relying on

govt. procedures to disburse and account for all funds

Core elements/attributes of SWAps

sector-wide in scope agreed coherent policy framework &

strategy national government leadership all/most donors sign on common/joint work program common management arrangements:

– disbursement and accounting of funds– reviewing performance

move towards reliance on govt. procedures

Variations in sector aid arrangements

Sector reform program

Project type aid

Earmarked funds

Pooled funds

Budget support

Stand alone projects

Project Self-contained One implementing

agency, one or a few financiers

Projects have own support systems

Implementation by a project unit overseen by a management committee

Project has clear beginning and end

Sector Program Open-ended and

complex (covers many projects and activities)

Many implementing agencies, many financiers

Common support systems

Project unit/management committee model cannot cope with complexity of program

Program is a rolling process with continuous planning, implementation

Contrast Project and Sector ProgrammeContrast Project and Sector ProgrammeApproachesApproaches

What is the “health sector”?

How the “health sector” relates to the “health system”

Does the sector refer to public sector only, or public and private actors?

Health outcomes are influenced by forces inside and outside the health system — how does SWAp address factors beyond health care?

How wide is sector-wide?

Ideally, a SWAp should capture the full spectrum of activity, financing and participation in the health sector

In practice, most SWAps only capture public expenditures (approx. 50% of total sector expenditure)

However, as SWAps mature, planning and budgeting functions capture more fragments of existing programmes, and new investment

Risks/common concerns in SWAps

Reduced/static govt. spending on health

Weak government capacity to implement/manage programme

Inadequate ownership/participation of wider stakeholder group

Disruption of services [transition] Suitability in decentralized systems

Risks/common concerns (2)

Loss of focus/fungibility Weak accountability environment Loss of attribution Increased demands on government

performance Treatment of some issues

[RH,gender] No window on the poor Capacity of govt to deal with NGOs,

PS

Risk: support systems during transition

Projects often have own procurement, training, info. & communication systems

Sector-wide management often brings common arrangements

Well-functioning programs risk being undermined by poorer ones

Timing of shift to common support systems critical

Part of donor reluctance to abandon projects

Advantages of SWAps (1) Increases predictability of funding;

[govt./DPs] Places government squarely in charge,

guided by policy and planned with knowledge of available resources

Identifies priorities; improves financing base

Reduces transaction costs (arguably) Applies interventions equitably, avoiding

geographic disparities

Advantages (2)

Increases transparency of resource Improves accountability Increased value for money Easier to disburse funds More effective partnerships Employs performance monitoring and

uses an evidence-based approach DPs: greater influence over policies,

priorities, expenditure

When is SWAp most likely to succeed?Where:

public expenditure in sector is high donor contribution is large donor co-ordination could be a problem donors willing to harmonize procedures agreement on strategy b/w Govt. & DPs supportive macro budget environment good fin/accountability mechanisms institutional relationships manageable relatively adequate national capacities

SWAp financing options Pooled or basket funding [budget support]

– thru/managed by govt. [preferred]

– managed by a partner Pooled with earmarking Parallel funding [for activities in program]:

– traditional projects

– direct provision of goods & services Mixed [some donors do both] Example: Ethiopia: 3/4 channels

‘Pools’ vary: scope, operation, coverage

Zambia: district basket restricted to non-staff, non-drug costs

Tanzania: district pool prescribed by spending categories; ceiling set at 50 US cents per capita

Mozambique: operates a drugs procurement and distribution pool for all levels of service delivery in the country

Time sliced financing” in Bangladesh: WB reimburses part of govt sector expenditure

Advantages of Pooling Focuses on strengthening govt. systems Transfers control to govt. Lowers transaction costs; eliminates

duplication of financing Collective risk; govt. & DPs Improves predictability of long term financing Promotes transparency, flexibility Improves coordination for greater impact on

agreed priorities Easier to disburse funds

Problems with Pooling

Requires strong government systems for management and accountability

Requires harmonization of donor procedures

Donors lose attribution to specific activities and outcomes

Fungibility/diversion of funds

SWAps and health sector reforms

SWAps not synonymous with HSR SWAps one of several reform initiatives,

including the following: Decentralizing budgeting/management of SD Separating financing from provision of

services Introduction of new financing/payment

schemes Devolving ownership of tertiary-care facilities Shifting donor funds from projects to SWAps Reorganizing MOH; redefining roles of units

SWAps & other development initiatives

Poverty Reduction Strategies (PRSP) Local government reform/ decentralisation National Development Strategies and

Perspectives (e.g. CDF; Vision 2025;…) National ublic service reform programs Public Expenditure Reforms(e.g. MTEF) Macroeconomic growth or decline and debt

servicing (e.g. HIPC II)

New funding modes: sector-wide approaches (SWAps) Program vs. project funding Agreed sector policy framework, often as

part of broader reform process Government capacity to manage

integrated sector program is critical Donor roles and coordination: pooled (or

“basket”) vs. parallel funding Roles of specialized agencies

Risks and benefits of SWAps Reduced fragmentation of government

effort, more coherent focus on priorities Government “in the driver’s seat” Is government able to manage sector

programs effectively? -- transition issues Risks to priority programs that had project

support (e.g. problems with procurement and technical assistance)

Special challenges faced by UN agencies and NGOs

Country examples (experience to date is fragmentary, mixed):

Bangladesh: restructuring underway, capacity problems (procurement)

Ghana: already reforming, SWAp in tandem with other reforms

Ethiopia: innovative funding model, program disrupted by war

Zambia: one of the first, not enough involvement of key stakeholders