Overview of Harmonisation, Alignment, and Results for Development Effectiveness

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Overview of Harmonisation, Alignment, and
Results for Development Effectiveness

Bo Westman Co-Chair, Task Team on Harmonization a
nd Alignment, DAC Working Party on Aid
Effectiveness Plenary Remarks, Bishkek Workshop o
n Harmonisation and Alignment November 9, 2004

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Overview of Presentation

• What is the harmonization and alignment problem
• Why is it important
• How is it being addressed
• Bilateral/Multilateral political support for
  change
  
• Country programs including in the Latin America
  and Caribbean region
  
• Monitoring the implementation-OECD-DAC Survey
• Joint Country Learning and Assessment and the
  Nicaragua High Level Mission
  
• Progress to date and emerging challenges
• Importance of Honduras Workshop
• Onwards to the Paris Forum

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The Problem? A Chaos of Good Intentions
Identification and ranking by developing
countries of the problems in the aid delivery
system, per the OECD-DAC Needs Assessment, 2002.
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The Problem Contd--Uncoordinated aid

• Proliferation of agencies, country strategies and
  diagnostic and lending instruments
  
• Redundant/duplicate systems of due diligence
  (accounting, budgeting, audit, procurement,
  environmental and social safeguards, monitoring
  and reporting, etc.)
• Waste of time, effort, and resources

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Why is it a Problem.

• Undermines country ownership.
• Increases unproductive transaction costs.
• Weakens capacity.
• Reduces aid effectiveness.
• Undermines public support.

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How Is It Being Addressed

• Technical work on good practices
• Rome High Level Forum
• Consensus on Framework of Action
• Institutional Set Up
• Marrakech and Focus on Development Results

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Technical Work

• 2002
• OECD-DAC Task Force on Harmonization produced
  good practices paper
  
• MDB working groups on procurement, financial
  management, environment
  
• 2003
• Endorsed at Rome High Level Forum

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Rome Declaration on Harmonization and Alignment
A Commitment by Donors and Partner Countries to
Fundamental Change

• Implement good practice principles and practices
  in aid delivery and management
  
• Use harmonized processes, procedures and
  requirements.
  
• Align donor programs with country priorities and
  improved systems
  
• See Rome Declaration on Harmonization, February
  2003.

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Consensus on Action Framework
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Institutional set up after Rome

• Working Party on Aid Effectiveness
• Mandate focused on country implementation.
• International membership and includes 14 partner
  countries.
  
• Shift from individual donor driven assistance to
  country-led collective development impact

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Marrakech and Focus on Results

• Core principles and action plan agreed
• Action plan being further developed in the DAC
  Joint Venture on Management for Results

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Strong Bilateral/Multilateral Agency Endorsement
at Highest Levels

• OECD DAC High Level Meeting Statement-15-16 April
  2004
  
• Accept significant changes required to way DAC
  donor agencies and field offices manage aid
  delivery
  
• Encourage developing countries to lead strong
  local coordination processes based on home-grown
  strategies and medium-term budget frameworks

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Development Committee Communique October 2,
2004

• We are committed to using the Second High-Level
  Forum on Harmonization in Paris next spring to
  translate these agreements into clear and
  specific commitments and timetables
• and call for the development of indicators and
  benchmarks to monitor the participation of all
  partners in this effort at the country level.
  

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Countries in Planning or Implementing Phase1/
Source World Bank Database on Harmonization
and Alignment, March 2004

1/ Scope of plans or actions vary.
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Country Examples

• Harmonization Action Plans
• Among 12 countries which have prepared or are
  preparing, 2 are from the Central Asia region--
  Kyrgyz Republic, Mongolia
  
• Development of Joint assistance strategies and
  programming
  
• In Tajikistan, EC and World Bank working on joint
  assistance strategies on key elements of poverty
  reduction programs

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Country Examples-Contd

• Sector Wide Approaches (Swaps)
• Over twenty countries implementing/ working
  including in Kyrgyz
  
• Procurement
• Twenty countries including in Kyrgyz, Mongolia,
  Tajikistan,Uzbekistan
  
• Financial Management
• Initiatives in over 35 countries, of which 24
  countries including Kyrgyz are in the initial
  stages

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Monitoring the Implementation

• OECD-DAC Survey on Harmonization

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OECD-DAC Indicators/Surveys

• Framework of quantitative and qualitative
  indicators developed to establish baseline on
  status of harmonization and alignment
  
• Three-part questionnaire
• Part 1 ? Government assesses ownership
• Part 2 ? Government and donors assess alignment
• Part 3 ? donors assess harmonization
• total of 13 indicators drawn from Rome
  Commitments
  
• Process managed by in-country government and
  donor
  
• lead coordinators
• Applied to the 14 OECD-DAC focus countries
• Compiled results to feed into Paris HLF-2

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Kyrgyz Results

• Government established a harmonization steering
  committee headed by Vice Prime Minister
  
• Country harmonization alignment action plan
  developed by government donor working group
  
• Government leadership in aid coordination needs
  better focus and donor support of action plan
  remains weak
  
• Sector priorities need better articulation for
  improved donor alignment
  
• Common arrangements in procurement and financial
  management need better development
  
• Bilateral donor efforts in harmonization and
  alignment need to be strengthened.
  

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Progress to Date

• International focus on improving aid delivery and
  management has increased.
  
• Covers project procedures, sector programs, and
  budget support operations
  
• Good Practice is not yet general practice
• Traction not strong enough yet
• Further progress requires institutionalization

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Challenges

• Harmonization and Alignment not a soft option
• Avoid parallel donor systems and increase
  reliance on improved country systems
  
• Coordinated and targetted capacity building of
  country institutions/systems critical
  
• Proactive reliance by donors on common
  arrangements missing
  

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Challenges-Contd

• Close gap between Headquarter commitments and
  ground level operations
  
• Clear directions to field and authority to act
• Staff and institutional incentives and budget to
  undertake HA
  
• Provide predictable aid to support medium term
  planning
  

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Importance of Bishkek Workshop

• One of four regional workshops prepared for the
  Paris Forum
  
• Designed to discuss harmonization alignment
  issues of region in global context
  
• Key messages from workshop will influence content
  of Paris Declaration
  
• Framework for a Declaration and Agenda for Action
  prepared for discussion

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Looking Towards Paris Forum, Feb 28-March 2, 2005

• Occasion to assess and account for progress
  against Rome commitments
  
• Time to build on progress made and push ahead to
  meet the ongoing challenges.
  
• Paris Declaration expected to call for clear and
  specific monitorable commitments and timetables
  
• Paris Forum expects over 2 Presidents, including
  President Akayev, 120 Ministers and the Heads of
  the bilateral donor agencies and the MDBs