Better Aid Improving Incentives in Donor Agencies : Good Practice and Self-Assessment Tool.

70 Pages·2009·0.388 MB·English

by  OECD

Better Aid
Better Aid
Improving Incentives in Donor Agencies
Improving Incentives
GOOD PRACTICE AND SELF-ASSESSMENT TOOL
in Donor Agencies
Under the Paris Declaration, donors and partner countries commit to “reform procedures
and strengthen incentives - including for recruitment, appraisal and training - for management
and staff to work towards harmonisation, alignment and results”. This commitment was based GOOD PRACTICE
on the recognition that the needed changes to behaviour will not happen automatically as there
AND SELF-ASSESSMENT TOOL
are a number of up-front and long-term costs - institutional, financial and political. The importance
of appropriate incentives in influencing managers and officials - and even more importantly political
leaders - to bring about the necessary changes, has been emphasised in a number of partner coun-
tries included in the Evaluation of the Paris Declaration.
If incentives are to shift across the board, determined leadership, reinforced by pressure from well-informed
stakeholders in partner and donor countries, will be needed. This publication adddresses this need
and aims to provide donor agencies with guidance on how to improve aid effectiveness, and to assist
them in identifying their strengths, weaknesses and gaps in incentives for promoting aid effectiveness.
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Better Aid
Improving Incentives
in Donor Agencies
GOOD PRACTICE AND SELF-ASSESSMENT TOOL
First Edition
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
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experiences, seek answers to common problems, identify good practice and work to co-ordinate
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opinions expressed and arguments employed herein do not necessarily reflect the official
views of the Organisation or of the governments of its member countries.
This series’ title (Better Aid) refers to OECD work on aid effectiveness. While it reflects a
goal that is shared by many – to use aid in ways that will produce much stronger impact
on achieving vital development goals – it is independent of the views and activities of
“Better Aid”, the CSO world platform on aid effectiveness (www.BetterAid.org).
Also available in French under the title:
Pour une meilleure aide au développement
Améliorer les dispositifs d’incitation dans les organismes donneurs
BONNES PRATIQUES ET OUTIL D’AUTOÉVALUATION
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FOREWORD
Foreword
U
nder the Paris Declaration, donors and partner countries commit to “reform procedures and
strengthen incentives – including for recruitment, appraisal and training – for management and staff
to work towards harmonisation, alignment and results”. This commitment was based on the
recognition that the needed changes to behaviour will not happen automatically as there are a
number of up-front and long-term costs – institutional, financial and political – associated with
changing the way donors and partners conduct themselves. The importance of appropriate incentives
in influencing managers and officials – and even more importantly political leaders – to bring about
the necessary changes has been emphasised in a number of partner countries included in the
Evaluation of the Paris Declaration.
The Evaluation also found continuing incentive problems applying to donors, including
interalia in respect of: organisational and individual targets; pressures to maintain the visibility and
attribution of agencies’ individual contributions, and to satisfy their individual fiduciary and
accountability requirements; the desire of some agencies to pursue non-developmental national
objectives in aid programmes; and the pressure for disbursements and “getting things done quickly”.
In addressing and overcoming these disincentives, the donor self-assessments find that a
number of donors “have undertaken significant efforts in supporting the Aid Effectiveness agenda at
headquarter and field levels through decentralisation, shifting implementation modalities and
strengthening and reforming guidelines and procedures”. However, to date, the 2008 Monitoring
Survey finds little overall indication that the incentives underlying donor practices (other than in
respect of aid untying) have altered significantly since the signing of the Paris Declaration.
It is clear that if incentives are to shift across the board, determined political leadership,
reinforced by pressure from well-informed publics in partner and donor countries, will be needed. The
DAC Peer Reviews highlight a number of positive efforts by individual donors, such as incorporating
Paris Declaration principles into their policy documents and increasing parliamentary and public
engagements and awareness. However, much more remains to be done. The present report addresses
this need and aims to provide donor agencies with guidance on how to improve aid effectiveness, and
to assist them in identifying their strengths, weaknesses and gaps in incentives for promoting aid
effectiveness.
The report consists of two parts:
● Part One identifies good practice guidance for donor agencies to improve aid effectiveness,
intended for different types of donor agencies, both multilateral and bilateral, and structured
around the basic principles of change management: leadership and management (including
commitment, communication and organisational culture); staffing (including recruitment and
posting, training and development, and reward and recognition); policies and procedures; and
budgeting and reporting (including performance monitoring and evaluation, and linking the
budget to results).
IMPROVING INCENTIVES IN DONOR AGENCIES – ISBN 978-92-64-05678-7 – © OECD 2009 3
FOREWORD
● Part Two provides a self-assessment tool for donor agencies. This tool is designed to assist them in
identifying their institution’s strengths, weaknesses and gaps on incentives for promoting aid
effectiveness. The assessment will help them to address any organisational and incentive-related
changes that are required for better aid effectiveness, thus helping them to meet their commitments
articulated in the Paris Declaration.
4 IMPROVING INCENTIVES IN DONOR AGENCIES – ISBN 978-92-64-05678-7 – © OECD 2009
ACKNOWLEDGEMENTS
Acknowledgements
T
he Report on Incentives for Aid Effectiveness in Donor Agencies was prepared by the Joint Venture
on Managing for Development Results, chaired by Joan Boer (Permanent Representative of the
Netherlands to the OECD) and Bruce Purdue (Asian Development Bank), under the auspices of the
Development Assistance Committee (DAC) Working Party on Aid Effectiveness, an international
partnership hosted by the DAC.
The Report draws on previous work of the OECD-DAC Working Party on Aid Effectiveness, on
studies by the Overseas Development Institute (ODI) and on extensive interviews undertaken by
PricewaterhouseCoopers (PwC) with headquarter and field staff from a core group of ten donor
agencies: Agence Française de Développement, Asian Development Bank, Canadian International
Development Agency, Millennium Challenge Corporation (United States), Netherlands Ministry of
Foreign Affairs, Swedish International Development Co-operation Agency, UK Department for
International Development, United States Department of State (Office of the Director of Foreign
Assistance), United States Agency for International Development, and the World Bank. All the
members of the OECD-DAC Joint Venture on Managing for Development Results were consulted in
the process of developing this report.
Thank you to Stefan Schmitz, Senior Policy Analyst in the Aid Effectiveness Division of the
Development Co-operation Directorate at the OECD and to his colleague Shayne MacLachlan for their
work in editing, formatting and making ready this paper for publication.
IMPROVING INCENTIVES IN DONOR AGENCIES – ISBN 978-92-64-05678-7 – © OECD 2009 5

TABLE OF CONTENTS
Table of Contents
Part I
Good Practice on Incentives for Aid Effectiveness
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Key issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Guiding principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Good Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Leadership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Policy and procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Budgeting and reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Part II
A Self Assessment Tool for Donor Agencies
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
When and how to use. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section A – Staff Survey. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
1. Awareness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2. Leadership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3. Staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
4. Policy and procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5. Budgeting and reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6. Critical success factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
7. Profile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section B – Organisational Diagnostic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
1. Leadership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
2. Staffing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
3. Policy and procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4. Budgeting and reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5. Scoring. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
6. Scoring sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
IMPROVING INCENTIVES IN DONOR AGENCIES – ISBN 978-92-64-05678-7 – © OECD 2009 7
TABLE OF CONTENTS
Section C – Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Template. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
List of Boxes
I.1. Building commitment and awareness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
I.2. Turning commitment into action. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
I.3. Human resource management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
I.4. Adapting guidelines and procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
I.5. Redefining the relationship between headquarters and country offices . . . . . . . . . . . . 32
I.6. Measuring implementation of the Paris Declaration principles . . . . . . . . . . . . . . . . . 35
8 IMPROVING INCENTIVES IN DONOR AGENCIES – ISBN 978-92-64-05678-7 – © OECD 2009