| |
Contributions from
the Column
Focus
Ownership and donor harmonisation: a brief introduction
Harmonisation: Donor pledges are steps in the right direction
How KfW Entwicklungsbank assesses budget support
Bangladesh’s PRSP and civil society
African opposition to neoliberalism
Political instability and programme-based approaches
07/2006
|
|
Coherent terms
Development terminology today bundles together concepts from the Bretton Woods institutions (World Bank and International Monetary Fund), United Nations and OECD. Donors agree that they need to harmonise their engagement because the way they have been acting in the past was inefficient. That consensus was put on record last year at an OECD conference, which passed the Paris Declaration on Aid Effectiveness, a binding document stating the intention of coordinating efforts more closely.
The Paris Declaration stresses the principle of ownership in the sense of target-country responsibility. Aid recipients must draft their own development strategies and translate them into coherent policy. Donors should help them to do so, without attempting to exercise remote control over other governments.
The same thought also underlies the approach of Poverty Reduction Strategy Papers (PRSP). Highly indebted developing countries have to define such strategies in order to profit from multilateral debt relief in the context of the HIPC initiative (the acronym stands for “highly indebted poor countries”). At the G8 summit in Cologne in 1999, the World Bank, International Monetary Fund and major donors agreed to let the countries concerned assume the leading role in the future. In the 1980s and ’90s, loans had been attached to strict conditions. Such conditionalities had been designed to force developing countries to get their macroeconomic act together (structural adjustment), but that strategy failed.
In the context of HIPC, national PRSPs are to be drafted with broad-based participation. The “owner” of the policy is not understood to be the government in charge, but rather society as a whole. It is hoped that promoting ownership will also raise the standard of governance.
In the objective of poverty reduction, the PRSP approach converges with the Millennium Development Goals, which the United Nations defined in 2000. Amongst other things, these goals set targets for halving malnutrition in the world and limiting the spread of malaria and HIV/AIDS by 2015.
Addressing the question of how ownership can be strengthened, the Paris Declaration stresses two aspects. Alignment means that donors should take account of recipients’ budget cycles, administrative procedures and other rules to keep down administrative costs. Programme-based funding, on the other hand, means that several donors pool funds in order to support target countries’ national budgets (general budget support) or sectoral programmes (basket financing).
These terms are conceptually coherent. However, things are often more difficult in practice than programmatic theory would suggest. The OECD recently commissioned an evaluation of budget support so far. Its findings include the following:
– A long-term approach is required; it takes time to strengthen government institutions.
– Successes are likely mainly in areas of consensus between donors and recipients.
– Capacity building is needed at regional and local levels; and donors should coordinate their efforts and use the poor countries’ systems wherever possible.
– Budget support is not a substitute for other instruments (such as projects) and should be introduced only gradually.
On a general note, the OECD’s press release warns against “unrealistic expectations”, as budget support is not a “panacea”. (dem)
Link:
OECD: Evaluation of General Budget Support
http://www.oecd.org/document/51/0,2340,en_21571361_34047972_
36556979_1_1_1_1,00.html
|
