Transcript BUILDING CAPACITY FOR MUTUAL ACCOUNTABILITY Matthew Martin Development Finance International ECOSOC DCF Preparatory Meeting Vienna, 20 April 2007 DFI, April 2007

BUILDING CAPACITY FOR
MUTUAL ACCOUNTABILITY
Matthew Martin
Development Finance International
ECOSOC DCF Preparatory Meeting
Vienna, 20 April 2007
DFI, April 2007
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STRUCTURE
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Introduction and Context
Why Capacity is Important
Current Levels of Capacity in
LICs
Current Efforts to Enhance
Capacity
The Way Forward
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INTRODUCTION AND CONTEXT
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HIPC Capacity-Building Programme works at
demand of 36 HIPCs to unleash capacity to
manage government financing (orig. debt relief)
Funded by six DAC donors (Austria, Canada,
Ireland, Sweden, Switzerland, UK)
Capacity-building organised in country by
sustainable regional organisations run by
developing countries – and executed by 150
developing country experts (South-South)
Presentation based on country views and much
wider paper on DCF prepared for UNDESA
For more details see www.developmentfinance.org and www.hipc-cbp.org.
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WHY CAPACITY IS IMPORTANT
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Ownership: no chance of genuine “ownership”
(preferably leadership) unless have designed and
implemented own strategies
Sustainability (long-term): cannot depend eternally on TA
and donor funding for consultants to monitor
Mutual Accountability: impossible to hold donors
accountable unless capacity to monitor, analyse and
negotiate improved behaviour
Ensuring Alignment: is lack of capacity to be used as an
excuse (“only align if capacity to produce results”) ?
Avoiding complacency ? Paris Indicator 4 comes out of
recent survey as 43% country-led though DCR
expresses doubts on the results (+ no quality indicator).
HIPC country evaluations indicate <20% both country-led
and building capacity
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RECENT/CURRENT CAPACITY LEVEL
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Broadest possible definition of capacity-building: political,
institutional, individual – commitment/institution-building,
training etc
HIPC CBP assesses capacity of 36 countries annually on
1-5 scale (5 highest)
Countries assess own capacity to maximise ownership,
analyse next steps and partners which could help
Then quality-controlled by implementing agencies to
ensure realistic
Divided into three major categories:
 Back office – recording/monitoring
 Middle office – analysis and strategy design
 Front office – capacity to implement and negotiate
 Issues cut across all offices - eg managing for results
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AID CYCLE
EVALUATION ANALYSIS
PFM/
PROCUREMENT
POLICY
RECORDING/
MONITORING
STRATEGY
COORDINATION/
NEGOTIATION
MOBILISATION
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RECENT/CURRENT CAPACITY LEVEL
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Back office: major/accelerating improvement since 2001
Middle office: considerable improvement but lags behind
Front office: began higher but slower improvement
4
Back Office
Middle Office
Front Office
3
2
2001
2003
2005
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CURRENT EFFORTS TO
ENHANCE CAPACITY
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Level and Progress Reflect Capacity-Building
Efforts by International Community
Back office:
Major effort put into recording – DAD/AMP/DCR
plus inclusion in Commonwealth Secretariat debt
system
 Outstanding issues
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 only
just starting to monitor quality/effectiveness
issues and adapt software ?
 Insufficient transfer of software design/maintenance
to countries
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CAPACITY-BUILDING EFFORTS (2)
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Middle office
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Design of aid policies
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Design of aid strategies
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Mostly written/facilitated by consultants, negotiated with donors
Too closely linked to Paris criteria, not enough adapted to country
problems eg conditionality, shocks, donor volatility/variability
Limited to overall principles and processes
Virtually no countries have designed a detailed strategy for
negotiating alignment by each donor, as well as forecasting
impact of alignment on aid needs/effectiveness + development
Must be major focus of future capacity-building for alignment
Analysis of macro- and micro-level absorptive issues
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Macro, Dutch Disease – dominated by IMF, excessive caution
Micro – not enough analysis of aid cycle and blockages
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CAPACITY-BUILDING EFFORTS (3)
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Front office:
Public financial management (budgeting, accounting,
auditing) – WB/PEFA
 Procurement – OECD/WB
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dominated by donor perceptions of best practice
and of partner performance – much more mutual
discussion needed to enhance ownership
Coordination and Mobilisation – UNDP/WB – more
need to focus on Results and Resources and big
picture rather than sectoral plans etc
 Negotiation of New Financing – WHO IS DOING ?
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 Key
need is building capacity to negotiate alignment
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CAPACITY-BUILDING EFFORTS (4)
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Location of Capacity
Far too much for Ministries of Finance and Planning
 Insufficient support to parliaments (finance, planning
and sectoral committees), decentralised agencies
(states, municipalities), independent bodies such as
auditor-general/national audit office, civil society
 Generally these stakeholders therefore assess
based on non-results issues
 (AfDB Study) – results are achieved where
parliament, decentralised agencies, other bodies
such as auditor-general, and civil society have
capacity to monitor and analyse RESULTS and
mechanisms to hold government
accountable
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BUILDING CAPACITY FOR MUTUAL
ACCOUNTABILITY: WHAT NEXT ?
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Mutual accountability can spring only from country-run
(government + civil society) design of national aid strategy
Thereafter countries monitor donors – not self-reporting –
to compile National Compendia of Donor Practices,
complementing Paris Surveys to set baselines
Compare with Global Compendium of Donor Best
Practices, to agree annual targets with each donor
Negotiate greater alignment of each programme or project,
refuse bad funding (“free riders”)
Diversify (for most LICs) or rationalise donors
Improve government own performance and be held
accountable not just by donors but by parliament and civil
society
Publicise donor progress to hold mutually accountable, use
independent monitoring to resolve tricky issues
Monitor progress and refine strategy as needed
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WHAT ELSE IS NEEDED ?
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DONOR POLITICAL OPENING: Clear demonstration that countries
can go beyond Paris both in breadth and ambition, agreement to
bilateral targets
2. PARTNER POLITICAL COMMITMENT: Honest discussion with
donors, will to hold accountable and be held accountable by civil
society, and to learn from best practices in other countries
3. GLOBAL INFORMATION:
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Analyse global issues eg allocation criteria, scaling up, orphans
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Global Compendium of Donor Best Practices (drafted)
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Exchange information (at regional and international level) on
relative performance of multilaterals, NGOs, vertical funds,
“emerging” donors
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Without dramatic reinforcement of evaluation, analysis
and negotiation capacity, supported by donor openness
and partner commitment, little chance of genuine mutual
accountability, alignment or attainment of MDGs
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