Managing development resources : the use of country systems in public financial management.

198 Pages·2009·3.981 MB·English

by  OECD

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Managing Aid better Aid
PrActices of DAc MeMber countries Managing Aid
The donor community is committed to increasing aid and to working with partners to make aid more
effective. Donors are held accountable for the way they manage aid and the development results PrActices of DAc MeMber
they achieve. They want to see more partner country ownership, greater use of partner country
countries
systems, and work better together. This involves decentralising responsibility, concentrating efforts,
managing for results, creating new systems, changing staff profiles, and building capacity in donor
and partner countries.
But just how do we achieve all this? There are many questions, and even more answers. Managing
Aid offers many of these answers, outlining what individual donors are doing to fulfil their
development co-operation ambitions and their part of the international agreements – reached in
Paris in 2005 (Paris Declaration) and Accra in 2008 (Accra Agenda for Action) – to make aid more
effective.
This book surveys the practices of the 23 members that make up the OECD Development
Assistance Committee. In doing so, it seeks to offer inspiration to aid managers and practitioners –
new and experienced – who are interested in continuously improving the way donors and partners
work together. The lessons learned should enable them to make greater strides towards their shared
goal: help partner countries to implement their own strategies to reduce poverty and give their
populations a better chance in life.
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Better Aid
Managing Aid
PRACTICES OF DAC MEMBER COUNTRIES
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
The OECD is a unique forum where the governments of 30 democracies work together to
address the economic, social and environmental challenges of globalisation. The OECD is also at
the forefront of efforts to understand and to help governments respond to new developments and
concerns, such as corporate governance, the information economy and the challenges of an
ageing population. The Organisation provides a setting where governments can compare policy
experiences, seek answers to common problems, identify good practice and work to co-ordinate
domestic and international policies.
The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech Republic,
Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea,
Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic,
Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The Commission of
the European Communities takes part in the work of the OECD.
OECD Publishing disseminates widely the results of the Organisation’s statistics gathering and
research on economic, social and environmental issues, as well as the conventions, guidelines and
standards agreed by its members.
This work is published on the responsibility of the Secretary-General of the OECD. The
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
“BetterAid”, the CSO world platform on aid effectiveness (www.BetterAid.org).
Also available in French under the title:
Pour une meilleure aide au développement
La gestion de l’aide
PRATIQUES DES PAYS MEMBRES DU CAD
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FOREWORD
Foreword
T
he world faces, in2009, many global events that influence development assistance and to which
development assistance must contribute solutions: the global financial and economic crisis, food
insecurity, and climate change, to name a few.
The donor community has experiences of both successes and failures on which to draw when
considering how best to approach the current situation. Since the beginning of this century, the donor
community has, indeed, devoted significant time and efforts to identifying the most pressing targets
to achieve – the Millennium Development Goals – as well as ways of doing so more effectively – the
Paris Declaration Principles and the Accra Agenda for Action.
The Development Assistance Committee (DAC) of the OECD remains a forum where we as
donors can share lessons, work to improve our practices, change the way we work and make our aid
more effective. Our MDG and Paris commitments have implications for our policies, how we organise
our administrations and agencies, how we deliver aid, and not least, for our partnerships with each
other and with recipient countries.
How each donor adapts depends on national circumstances: laws and policies, administrative
and civil service structures, the size of the programme, experiences to date. There are many questions
and even more answers.
This book discusses how donors deal with these major issues in different ways within the
opportunities and constraints their systems offer. It should serve to inspire the aid manager and
practitioner to look for ways to improve their operations. The book should be particularly helpful to
donors who are looking to grow, strengthen or consolidate their programmes. And it should help our
publics and our partners to understand how we work and to hold us accountable. Managing Aid
draws on the practices of the 23members of the Development Assistance Committee through the
lens of their periodic peer reviews.
This compendium of donor practices should serve us well in our continuous efforts to reform and
do better – achieving our goal of a more just and equitable world.
Eckhard Deutscher
Chair
Development Assistance Committee
MANAGING AID: PRACTICES OF DAC MEMBER COUNTRIES – ISBN 978-92-64-06021-0 – © OECD 2009 3
ACKNOWLEDGEMENTS
Acknowledgements
This reference document stems from a request by DAC member countries to update
the original Managing Aid: Practices of DAC Member Countries published in2005. The
publication was co-ordinated and written by Elisabeth Thioléron in collaboration with
Genny Bonomi and Ida McDonnell, with inputs from numerous colleagues in the DCD, in
particular Jacinta Byrne-Dequéant, Stephanie Coic, Steve Darvill, Anna Hellstrom, Carola
Miras and Katie Taylor. Our special thanks go to Karen Jorgensen, the DAC Advisory
Committee and the DCD editorial term, for their constructive insights and comments.
In2007, the 23members of the OECD’s Development Assistance Committee (DAC)
disbursed over USD 100billion of public funds for development. This represented an
estimated 90% of total official development assistance (ODA) spent worldwide. How they
manage that aid is the subject of Managing Aid: Practices of DAC Member Countries (hereafter
Managing Aid). The study builds on Effective Aid Management: Twelve Lessons from DAC Peer
Reviews, a synthesis that draws lessons from five years of DAC peer reviews of aid
management issues, ranging from policy to delivery, in DAC member countries (OECD,
2008a). It also borrows from other comparative analyses of peer reviews such as the OECD’s
“Synthesis Report on Policy Coherence for Development” (OECD, 2008b) and the Evaluation
of the Implementation of the Paris Declaration, Phase One, First Phase Synthesis Report (Wood
etal., 2008).
4 MANAGING AID: PRACTICES OF DAC MEMBER COUNTRIES – ISBN 978-92-64-06021-0 – © OECD 2009
TABLE OF CONTENTS
TTaabbllee ooff CCoonntteennttss
Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Chapter 1. The Legal and Political Foundations forDevelopment Co-operation . . . . . . 15
Legal and political issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Public support. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Chapter 2. Policy Coherence for Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Promoting coherent development policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Key elements in promoting policy coherence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Chapter 3. Organisation and Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Organisational structures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Development co-operation systems in DAC member countries. . . . . . . . . . . . . . . . . 30
Leadership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Evolution of aid management structures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Co-ordination in aid systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Chapter 4. Managing Human Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Approaches to human resource management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Planning human resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Chapter 5. Aid Allocation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Official development assistance (ODA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Allocating increases in development aid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Contribution of non-DAC donors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Other sources of funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Selecting partner countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Allocation by sector or theme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Humanitarian aid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Regional programmes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Chapter 6. Managing Bilateral ODA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Financing development co-operation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Aid predictability and disbursement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
MANAGING AID: PRACTICES OF DAC MEMBER COUNTRIES – ISBN 978-92-64-06021-0 – © OECD 2009 5
TABLE OF CONTENTS
Managing aid in partner countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Aid delivery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Civil society organisations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Chapter 7. Managing Multilateral ODA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Multilateral assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Global funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Chapter 8. Implementing theAidEffectivenessAgenda. . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Aid effectiveness agenda: Institutional challenges. . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Progress in making aid more effective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Practicing the five principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Chapter 9. Managing Cross-sectoral Issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Bridging the gap between policy and implementation . . . . . . . . . . . . . . . . . . . . . . . . 86
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Chapter 10. Monitoring and Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Monitoring. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Evaluation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Advisory bodies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Chapter 11. Humanitarian Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Disaster risk reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Improving the performance of the humanitarian sector. . . . . . . . . . . . . . . . . . . . . . . 101
Managing humanitarian aid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
The future of donor-led humanitarian action. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Annex A. DAC Member Country Profiles on Foreign Assistance . . . . . . . . . . . . . . . . . . . 109
Annex B. OECD DAC Statistics: A Brief Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
Annex C. Official Development Assistance2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183
Annex D. Principles and Good Practice of Humanitarian Donorship. . . . . . . . . . . . . . . . 189
Annex E. Millennium Development Goals and Targets. . . . . . . . . . . . . . . . . . . . . . . . . . . 193
Boxes
0.1. Twelve Lessons from DAC Peer Reviews. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.1. Winning public support for development assistance
innon-DACmember countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.1. Lessons from DAC peer reviews on policy coherence for development. . . . . . . . 25
3.1. Development co-operation models in DAC member countries . . . . . . . . . . . . . . . 32
4.1. Innovative learning programmes: Example from the Netherlands. . . . . . . . . . . . 43
5.1. Official development assistance, bilateral and multilateral assistance . . . . . . . . 48
6 MANAGING AID: PRACTICES OF DAC MEMBER COUNTRIES – ISBN 978-92-64-06021-0 – © OECD 2009
TABLE OF CONTENTS
5.2. Administrative costs in ODA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.3. The challenges of scaling up in Spain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.4. Triangular development co-operation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.5. The United States’ Millennium Challenge Corporation. . . . . . . . . . . . . . . . . . . . . . 54
5.6. Whole-of-government approaches in fragile states and situations . . . . . . . . . . . 56
6.1. Attitudes to co-ordination in Andalucia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.1. The Multilateral Organisation Performance Assessment Network. . . . . . . . . . . . 71
7.2. Global funds and the Paris Declaration: Progress and challenges. . . . . . . . . . . . . 72
8.1. The Accra Agenda for Action: Challenges for aid managers. . . . . . . . . . . . . . . . . . 76
8.2. The Joint Assistance Strategy for Tanzania. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
8.3. Mozambique’s Programme Aid Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
8.4. Division of labour in Zambia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
9.1. Using joint assistance strategies to integrate cross-sectoral issues . . . . . . . . . . . 89
10.1. DAC Principles for Evaluation of Development Assistance. . . . . . . . . . . . . . . . . . . 94
10.2. Benefits of joint evaluations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Tables
4.1. Distribution of DAC members’ development staff between headquarters
and field offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
C.1. DAC Members’ Net Official Development Assistance in2007 . . . . . . . . . . . . . . . . 183
C.2. Share of Debt Relief Grants in DAC Members’ Net Official Development
Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
C.3. DAC Members’ Gross official development assistance in2007 . . . . . . . . . . . . . . . 186
C.4. ODA recipients. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
Figures
3.1. Examples of organisational structures for managing aid . . . . . . . . . . . . . . . . . . . . 31
4.1. Percentage of staff located in headquarters and the field
(expatriatesand local staff). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.1. DAC members’ net ODA1990-2007 and DAC Secretariat simulations to2010 . . . . . 50
C.1. DAC Members’ Net Official Development Assistance in2007 . . . . . . . . . . . . . . . . 184
MANAGING AID: PRACTICES OF DAC MEMBER COUNTRIES – ISBN 978-92-64-06021-0 – © OECD 2009 7