Transcript Slide 1

Outcome-based conditionality:
Too good to be true?
Oslo, 30 October 2007
But what do we mean
when we talk about
“results”?
When hearing the word “results” in the framework of development,
presumably, the average citizen would think of people lifted out from
poverty:
lesser number of women dying at delivery;
- more children into schools and less illiteracy rates;
- better health conditions of population in developing countries or
- less dying every day because of hunger.
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“Outcome-based conditionality means different things
to different people”
Senior IMF official
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The World Bank: no
conditions, no party
Country
Sector
Outcome
World Bank: “Outcomes areProgram
the short- and medium-term effects
on broader society of government
actions.”Indicator
Mali
PRSC 1
Electricity
Ratio of gross
operating profits to
sales revenue
Mali
PRSC 1
Water
Number of piped
water systems
managed under
PPP
Burkina Faso
PRSC 6
Private sector
Bidding documents
and tender ready
for the selection of
a private operator
Tanzania
PRSC 5
Macroeconomic stability
Inflation rate
consistent with
PRGF target
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European Commission:
“outcomes measure progress
towards poverty reduction”
The EC understands that “results” are “indicators used … at the level of the
effectiveness, coverage or uptake of public service delivery related directly to
poverty reduction.
Typically, indicators cover:
-enrolment of boys and girls at school, net enrolment, primary school
completion rate,
-vaccine coverage,
-rate of assisted delivery,
-and % of women covered by family planning or “other MDG” indicators.
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Expectations for outcomebased conditionality:
Encourage a focus on results by using indicators of
service delivery / poverty reduction;
- Protect the political space for Governments to determine
policy;
- Streamline conditionality;
- Allow graduate response to partial performance instead of “all
or nothing”;
- Promote domestic accountability;
- Stimulate demand for quality data on poverty.
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How does the EC
approach work?
1.
2.
3.
4.
Negotiation of PAF by the joint donor group – the EC negotiates
insertion of outcome-based indicators;
The EC decides which outcome-based indicators will be included in
the Financing agreement and operationalises the disbursement
details;
The EC uses the annual joint reviews of the group of donors to
decide the share that is going to be released;
If there is no agreement on the percentage to be released, the
Article 96 of the CPA applies…
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What has been the
impact?
Cases of Burkina Faso,
Mozambique and
Tanzania
A)
Creating incentives for poverty reduction:
71% of the variable tranche released
Positive joint annual reviews – targets met
Alternative sources, not so positive...
B) Opening-up policy space:
Lower number of conditions – but overall increase in PAFs
No changes noticed in ownership / country leadership
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Number of conditions in
EC Financing agreements
Country
Fixed
tranche
PFM
Education
Health
Total
Burkina
Faso
9
7
6
6
28
Mozambiqu
e
3
3
4
4
14
Tanzania
3
6
6
5
20
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Assessment and
operational challenges
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Conditionality baskets and data availability
Not enough funds to make a difference
Cryptic data: failing to improve downwards
accountability
Outcome-indicators: a cure or a curse?
Long term commitments VS short term
disbursements
Limited civil society participation
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Share of budget support
linked to social sector
outcome indicators
7%
3% 3%
Bugdet Support from
other donors
EC Fixed Tranche
EC PFM Variable
Tranche
EC Social Sector
Variable Tranche
87%
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How do PAFs look like?
Country
Action
Outcome
indicators
Targets
Mozambique
Approve,
implement and
assess the strategic
plan
Net enrolment rate 85%
Tanzania
Issues paper for
business activities
Move up in the
“Doing business
ranking”
Move from 150 to
99 in the DB
ranking
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Political challenges
1. Joint budget support groups:
- contextual burdens and little EC leverage: WB and EC battle over
influence in donor groups
2. But also long-standing power imbalances in aid relationships
- i.e.: Article 96
- indicators reflect EC political priorities?
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Tentative conclusions and
recommendations
Positive effects:
-OCB has pushed a results based approach;
-Partially achieved to streamline conditions;
Real concerns remain on attribution, predictability, …
Can further potential be unleashed? Remains unanswered but…
-Improve process – including CSO participation
-Improve indicators (including choice of)
-Improve collection and disclosure of data
-Yearly assessments?
-Revise technical complexities
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By Nuria Molina-Gallart
[email protected]
www.eurodad.org
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