supporting sector programmes

September-December 2006 SWAP Joint Learning Event1

train4dev

Training for Development

Supporting Sector Programmes

A three - day learning event


train4dev


Objectives

1. Key components of a sector programme and the language used

2. Conditions for success and best options to support to the process

3. Know your own and others’ roles4. Deal with major risks and challenges,

and...5. Identify the next steps to move the

process forward


train4dev


The Topics1. The Aid Agenda, concepts and components

2. The policy framework

Day 1

3. Linking policy and implementation

4. Capacity to implement

Day 2

5. Accountability and performance monitoring

6. Supporting the process - and the next steps

Day 3


train4dev


Module 1: The Aid Agenda & key SWAp concepts

Sector Approach

Support to Sector Programmes

Sector Programme


train4dev


The lessons leading to the aid agenda

• Failure to improve the lives of the poorest

• Low aid effectiveness due to:Weak statesFragmentationMultiple donors and approachesSkewed accountability


train4dev


The agenda: poverty reduction

Strengthen local ownership over decision-making on policy,

strategy and spending

Use/strengthen partners’ systems, harmonise donor

systems

Increase coherence between policy, spending and actual

results


train4dev


Harmonisation & Alignment


train4dev


The result: Programme Based

Approaches

“PBA is a way of engaging in development cooperation based on the principle of co-ordinated support for a locally owned programme of development such as a national poverty reduction strategy, a sector programme, a thematic programme or a programme of a specific organisation”


train4dev


The ‘new’ approaches allow for:

• Focus on effective policy processes and governance: comprehensiveness, consultation processes, accountability

• Focus on government: linking policies and the budget process

• Focus on other national stakeholders: private sector and civil society role & participation

• Focus on donors and aid: coordination, harmonization, alignment


train4dev


The process

is…

…country driven, not

donor driven

…partnership based

…results-oriented

…comprehensive – reflecting

multi-dimensions of

poverty

…prioritised: implementation feasible

…participatory

, involving parliament & civil society

Core principles


train4dev


Overview – Programme Based Approaches Approach Modality

Projects

Policy dialogue

Agreement on povertypolicy results

Agreement premature or non-public actors

Macro level e.g. PRSP

Sector levele.g. Healthagriculture

Budgetsupport

Budget support

Pooled funding

Donor procedures

Donor procedures

Donor procedures


train4dev


Use/strengthen partners’ systems, harmonise donor

systems

What is the Sector Approach?

Ensure local ownership over decision-making on policy,

strategy and spending.

Increase coherence between policy, spending

and actual results

A way of working of government and partnerswith three distinct objectives:


train4dev


What is a ‘Sector’?

• Defined by the government• Wide to ensure coherence,

narrow to limit complexity• Fairly coherent & consistent

policy• Institutional framework• Budget framework• Links to macro framework


train4dev


Donors

Who are the sector stakeholders?

Legislative, policy makers

Executive policy makers Front line staff

Central levelbureaucracy

Private serviceproviders

Supervisory bodies, legal systemUnions

Powerful elites

Citizens, service users


train4dev


What is a Sector Programme?

A Sector Programme is a product of the Sector Approach. It is a government

(not donor) programme


train4dev


Sector programmes: 5 typical elements

Sector policy in macro-framework

Public financemanagement

Accountability & Performance

monitoring

Institutions and capacities

Aid alignment andharmonisation

Services and enabling

environment


train4dev


Five means of donor support to emerging or existing SPs

Sector programme

Financial support

Facilitation, catalyzing, networking

Foster knowledge acquisition

Joint policy dialogue

Pursue the sectorapproach


train4dev


Three financing modalities for support to a SP

...or a combination of these

Budget support

Donor procedures

Pooled funding


train4dev


Financing modalities

Other Sector national budgetrevenues support

‘Pool Fund’Donor XDonor Y

Do

no

r X

Through Treasury

Co-financed activities

Projects

Sector Programme

Do

no

r Z

PPP

Own funds


train4dev





Do

no

r X

Through Treasury


Projects

Sector Programme

Do

no

r Z


train4dev


Aid instruments and associated burdens

Procurement conditions

Targeting

Untied Tied

Narr

ow

B

road

Gove

rnm

.

Don

ors

Donor GovernmentOn

Off

On/off budget

Disbursement channel/system

Monitoring

Tech.

Assista

nce

Donor

G

ovt.


train4dev


Sequencing in Sector

Programmes

Policy and strategy dialogue

Strengthened coordination

Single SP document

Medium term expenditureframework

Common monitoring

Harmonization and alignment of procedures

No fixed pattern….but some things are often earlier in the process

Earlier Later


train4dev


Assessment of Sector Programme elements

Why assess?• Agree where and how support is needed• Agree on issues for analysis and dialogue• Keep track of changes, adjust plans & support What to assess? • The 5 elementsWhen to assess?• ContinuallyHow to assess?• Next modules!



Accountability & performance

monitoring




environment


train4dev


Module 2: The policy framework

Key issues:•Policy-making•The macro-setting•Assessing the sector-policy•Assessing policy processes•From policy to actions


Public finance management


monitoring



Serv

ices a

nd

en

ab

ling

en

viro

nm

en

t


train4dev

Training for Development The Policy-Results chain

Approved annual

budgets

National &Sectoral Policy

Service Delivery / Results

Actual Spending

Set priorities & phasing

Strategic planning, medium term financing

Operational planning Public finance

management and accountability systems

Implementation

Performance Monitoring & Client Consultation systems

Feedback Process

Institutional assessment


train4dev


Understanding policy making

• Policies are about politics and interests – creating winners and losers

• Policies and strategies are rarely fully clear and consistent

• Policy making does not stop with a paper or plan

• Policy making is not a linear process• Policy without power is pie in the sky


train4dev


Assessing the sector in the macro context

• Is macro-economic framework conducive for sector progress?

• Some consensus and broad endorsement of macro-policies and strategies?

• Articulation between national policy and sectoral policy?

• Sector stakeholders appropriately involved in macro-policy processes?


train4dev


Assessing the sector policy• Goals adequately pro-poor?• Goals accommodating elite interests?• Goals reasonably specific and results

oriented?• Long term affordable?• Priorities matching resources and

capacity? • Focus on whole sector needs?


train4dev


Assessing the sector policy process

• Authored by government and domestic stakeholders?

• Evidence based?• Permanent stakeholder consultation

channels?• Endorsed by cabinet and parliament?• Endorsed by power elites?• Publicly available?• Will policy failure have political

consequences?


train4dev


Assessing the policy-plan-action links

• Track record?• Fairly clear roles & responsibilities?• Proliferating and disconnected

planning processes?• How much remains “off plan/off

policy”?• Local governments “on policy”?• Intra-sector link, cross-cutting issues?


train4dev


Module 3: Public finance management

Key issues:•The policy - budgets results link

•The MTEF – principles and practices

•Financial accounta-bility to the public

•The quality of PFM•safeguard concerns

•Implications for SP




monitoring




environment


train4dev


What do we expect of the PFM system?

Aggregate fiscal

discipline

PFM System(Budget –

MTEF-Accounts-

Audit)

Efficient service delivery

Strategic allocation of resources

Financial accountabilit

y to the public


train4dev


For whom is PFM important?• Citizens: developmental and fiduciary interest

• Government: development and policy goals

• Donors – to support successful aid delivery and utilisation (including issues of accountability “at home”)

Issues and challenges:

• Focus shifts from budget allocation to accountability and FMIS - but all dimensions are important

• Capacity: how to strengthen institutional capacities?

• How to ensure political buy-in?


train4dev


Public financial accountability

• The role of parliament• The role of an independent Auditor

General• Timely and widely available public

accounts/ budget out turns• Ombudsman• Think tanks, elite(s) pressure groups• Media


train4dev

Training for DevelopmentThe annual budget cycle – transforming plans to

spending Service

outputs

Reporting and audit

Budget

Strategic

planningBudget

preparation

Budget executi

on

Accounting and

monitoring

Policy review


train4dev


The budget process• Allocating resources to policy

priorities – who participates and is their a medium term view

• Predictability• A clear budget calendar – what

information and negotiation is needed when, where and between whom

• Monitoring of budget out turn and reporting

• External scrutiny and audit


train4dev


Disciplined top-down/bottom-up processes

Strategic macro level budget framework

Macro fiscal framework

Analysis of cross cutting issues

Analysis of inter sectoral resource allocation issues

Sector resource ceiling

Sector strategies

Programme resource allocation

Resource implications of sector policies and strategies

Identification of new efficiency measures

Review of expenditure programmes


train4dev


Linking spending to policy while maintaining fiscal discipline

Medium term fiscal

framework

Hard budget ceiling

MTEF

Prioritised affordable

sector policy

framework

3-5 year sectoral

expenditure

frameworks

Annual Budget

Implementation

Service outcomes

Medium term budget expectation


train4dev


Medium term financing process

Can help look at alternative sector policy financing scenarios

Strategic role in informing budget preparation

May or may not lead to a separate document

Status may differ - depends on country

Ideally includes: history, policy, objectives, priorities and financial tables


train4dev


Making medium term planning realistic

OECD/DAC GoodPractice Paper 2- Be pragmatic:Build sector expenditure framework

progressively Look at affordability issues, cost

structure, drivers of costs Be comprehensiveness: all (public)

funding Don’t stop at policy planning


train4dev


PFM reforms and implementation of Sector

Programmes• Possible focus of PFM reform for SPs &

MTEF:Budget classification/ accounting coding

Budgeting techniques and “link to performance”

Shift in, and strengthening of control systems

Cash flow planning and budget management

In-year reporting and monitoring FMIS

Procurement

BUT – how far can the sector ‘go it alone’?


train4dev


PFM reform: any good practice?

Realistic strategy:Sequence and prioritise reforms

Coordination (incl. donor support) paramount

Comprehensive capacity development including incentive issues

Ensure political support to tackle vested interests in “status quo”

Monitoring PFM reforms using PEFA


train4dev


PFM good practice

PEFA: 6 key characteristics, 31 indicators

Credibility of the budget

Comprehensiveness and transparency

Policy-based budgeting

Predictability and control in budget execution

Accounting, recording and reporting

External scrutiny and audit


train4dev


Module 4: Institutions and capacities

Key issues:•External drivers•Incentives•Output focus•Joint support to CD



Accountability& performance

monitoring



Serv

ices a

nd

en

ab

ling

en

viro

nm

en

t


train4dev


Capacity and Capacity Development

• Look for external drivers of and constraints on capacity beyond the sector

• Assess incentives and disincentives to performance

• Use outputs as proxy indicator for capacity

• Joint approaches to CD support


train4dev


Contextual factors within influence

Contextual factors beyond influence

Capacity of sector organisation(s)

Inputs

Im-pact

Out-comes

Out-puts

Governance

The Open Systems Model


train4dev


The context shapes capacity

• Domestic pressure on the sector to deliver?

• Effective oversight?• Enabling legal framework?• Predictable resources?• Cross-sector civil service

conditions?


train4dev


Incentives and disincentives

• Good systems, structures, processes..but:

• Getting incentives, motivation and power to perform right may be biggest obstacle

• Distorted incentive regime often beyond sectoral repair

• Sector capacity development ambitions has to be adapted to this


train4dev


Two complementary dimensions of capacity

Functional dimension “Political” dimension

Main unit of analysis?

Drivingforces?

Image of man?

Change?

Change efforts?

Focus on functionaltask-and-work system

A sense of norms, intrinsicmotivation

Employees caring for theorganisation

Participative reasoning,finding best technicalsolution, orderly

Internal systems, structures,

skills, technology etc

Focus on power-and-loyalty systems

Sanctions and rewards,incentives

Individuals caring for themselves

Internal conflict, coalitionwith powerful externalagents, unpredictable

Incentives, change of keystaff, outsmarting opposition


train4dev


Outputs as proxy for capacity

• Immediate effect of capacity: sector outputs!

• Past outputs trends often point to likely future

• Focus on outputs can involve users• Output focus for CD – rather than

focus on inputs (TA, training)


train4dev


Donor support to capacity development

• Respect ownership, all the way through• National leadership is essential – no will,

no way• Look for change drivers in the context,

and help getting incentives right• Supply-driven TA and training for CD

continues to have poor track record• Push for joined-up and sector wide

attention to CD• Phase out piecemeal single donor

initiatives


train4dev

Training for DevelopmentModule 5: Accountability and performance

monitoringKey issues:•The results agenda supporting accountability•The focus on outputs and outcomes•Information demand and supply•The monitoring process•Good indicators•Implication for support to SPs




monitoring




environment


train4dev


Accountability


train4dev


Focusing on performance: the demand-side

The State Evidence based policy making, internal accountability

and ownership, learning, accounting to citizens

Civil society Pressure for social and political accountability, informs

participation in policy making

Providers Responsiveness to clients and account to them and state

Donors Transparency of donor behaviour; accountability to

constituencies, informs participation in policy dialogue


train4dev


The supply-side: sources of information and quality

• Administrative data (sector ministries, routinely collected)

• Broad Surveys (National Household Surveys)

• International data bases (Cross-country comparison)

• Special studies and ad-hoc collection of data - PETS

• Donor-initiated data collection and reports

• The quality of most data depends on: multiple capacity factors

usefulness of the data at the level they are collected

the power and intentions of those requesting the data


train4dev

Training for DevelopmentIntl’ commitments (MDGs,WTO), PRS

Sector Assessment Framework

Effectiveness

Efficiency

Inputs

Processes

Outputs

Outcomes

Impact

Revie

w a

nd

monito

ring

Evalu

atio

n

Sector policy making

Strategic planning

Managing

and

budgeting

Targets agreed with donors


train4dev


Performance monitoring processes

How strong are govt systems to “service” this framework? What are the reporting systems and procedures in place?

Clear identified information needs at each ‘level’

Agreed timetable of events Capacities to collect, select and relay Capacity to analyse and integrate in decision

making Timeliness of data for key activities and

outcomes Feedback mechanism/ process into policy,

planning, management, experience sharing


train4dev


Common issues • Annual targets - how, who, when, and any

role for donors… conditionality?• Performance assessment frameworks,

performance based contracts, results-orientation – does it all add up, and are distortions manageable?

• Input and process – or only outputs or outcomes?

• What if targets are not being reached?• What if the data is not ‘clean’ or timely?• Can ad hoc collection of data be justified in

SP support?


train4dev


Module 6: Aid alignment and harmonisation, support modalities

and toolsKey issues:•Alignment and harmonisation agenda•Reality of aid coordination•Areas for alignment and harmonisation•Alignment instruments•Support modalities




monitoring




environment


train4dev


Harmonisation & Alignment


train4dev


Government leads..

The ideal….

Donor 1

Donor 5

Donor 2

Don

or 4

Donor 3

Based on assumptions about:

• Trust & personal ties

• Joint objectives or shared cause

• Loyalty towards the country group

• Everybody has a voice

•Once you are in, you stay


train4dev


Government leads..

…struggling with reality

Donor 1

Donor 5

Donor 2

Don

or 4

Donor 3

Where there is also

• Distrust & rotation

• Multiple objectives not always shared

• Loyalty towards HQ and patrons

• Some have bigger voices than others

•Suddenly you go

HQ and hinterland

HQ and hinterland

HQ and hinterland

HQ and hinterland

HQ and hinterland

NGOs


train4dev


Areas for coordination: harmonisation and alignment

• Reporting, budgeting, financial management, procurement

• Preparation of support• Monitoring and reviews• Evaluations• Analytical work, knowledge

acquisition • Policy dialogue• Cycle alignment


train4dev


Alignment Instruments

• Memorandum of understanding• Code of Conduct• Joint financing agreement• Joint Assistance strategies• Agreed, limited agenda• Functional division of labour • Coordinating systems timetables

(donor/ government)• “Go-between” TA??


train4dev


Key issues:

•5 types of support

•3 financing modalities, their advantages and disadvantages

• The role of donors

Support to Sector Programmes

Sector programme

Joint policy dialogue

Pursue the sector

approachFinancial support

Facilitation, catalyzing, networking

Foster knowledge acquisition


train4dev


What of conditions?

Conditions are often part of SP support:• Macro level • Sector level • Sub-sector level • Programme level

• How are conditions/triggers/targets negotiated?

• Are sanctions/rewards enforced?• How open is dialogue about effectiveness?


train4dev


Three financing modalities for support to a SP

...or a combination of these

Direct budget support

Donors’ own procedures

Pooled funding


train4dev





Do

no

r X

Through Treasury


Projects

Sector Programme

Do

no

r Z

PPP

Own funds


train4dev


Sector budget support

• Transfer of resources to the budget of a partner country, uses that country’s budget, financial management and procurement systems

• Monitoring of set of sectoral indicators

• Dialogue with sector actors


train4dev


Executed against specific budget lines and approved by the

donors

Funds are used as others national

revenues

Budget Support can be…

Non targeted

Targeted


train4dev


Considerations for sector budget support

• In principle, most completely aligned modality

• Requires ‘adequate’ PFM • May undermine PRS and wider coherence• Fear of mismanagement • Excessive donor focus on PFM• Dialogue on policies and medium term

outcomes only, loosing touch with ground realities

• May add inputs without addressing capacity constraints

• Longer term sustainability


train4dev


Pooled common fund

• Use of “third party procedures” – donor or government, if latter often with extra checks – which should strengthen systems

• By definition targeted to specific expenditure items

• Different types according to:Who manages itThe coverageDisbursement, procurement, accounting and

reporting


train4dev


Considerations for common pooled funding

• Only one set of procedures, as opposed to each donor using own procedures

• May accommodate safeguard concerns of donors when PFM or capacity is weak

• May focus on specific priorities (e.g. capacity development)

• May undermine wider fiscal coherence and sideline Ministry of Finance

• May be costly in transaction costs to establish/ maintain

• May create/ maintain parallel implementation structures

• May dilute legal accountability


train4dev


Donor specific procedures

• By mandate, only legal option for some donors and countries

• By preference of some, preferred option for small grants, technical assistance, preparatory phases, pilot activities

• By risk assessment, choice others to comply with fiduciary safeguard requirements

• By some, modality of last resort


train4dev


Considerations for donors’ own procedures

• Can be adequate in building up of a sector approach• May serve flexibly for piloting, TA, post-conflict• May by-pass red tape and add flexibility• Safeguard level high

• Easily undermines ownership, ‘purse strings’ are with donors• Higher transaction costs• Often less flexible• Fragmentation of efforts• By-passes implementation constraints rather than addressing them


train4dev


A combination of modalities?

• Often the reality, preferred or not!• More complex for government in terms of

programming and accounting

No matter the combination, all modalities can:

• Be within the multiyear budget framework and adapt to government classifications;

• Be within the sector policy framework;• Use joint monitoring and reporting

procedures• Participate in sector policy dialogue

supporting sector programmes

Documents