turning the tables: aid and accountability under the paris framework a civil society report

8/7/2019 Turning the Tables: Aid and accountability under the Paris framework a civil society report

1/60

A civil society report

April 2008

Turning the TablesAid and accountability

under the Paris ramework

RODADDHD Niger


2/60


3/60

Turning the Tables : Aid and accountability under the Paris ramework

This is a joint NGO report written by the European Network on Debt and Development (Eurodad), based on analysis o aide ectiveness using actual data and interviews conducted in seven countries: Cambodia, Honduras, Mali, Mozambique,Nicaragua, Niger and Sierra Leone. Each case study brought evidence and opinions to help generate understanding anddebate ahead o the o cial aid e ectiveness processes taking place in 2008. This report is endorsed by ten A rican andEuropean organisations. These are: ActionAid International, CAFOD, Campaign or Good Governance, Centre National deCoopration au Dveloppement, Fdration des Collecti s dONG du Mali, Ibis, Ox am International, Rseau des Ong deDveloppement et Associations de D ense des Droits de lHomme et de la Promotion de la Dmocratie, Trcaire and theUK Aid Network.

The report has been written by Lucy Hayes and Javier Pereira. Many others have contributed. We would like to thank allo the individuals rom Eurodad members and southern organisations involved in producing country case studies and

who also provided comments and corrections on this dra t. They include: Christian Lawrence, Valnora Edwin, Caoimhede Barra, Tanya Kleibl, Etienne du Vachat, Mamadou Traor, Carlos Pacheco, Julia Metcal e, Sally ONeill, Joanne McGarryand Gaspard Denis. Thanks in addition to Hetty Kovach, Jesse Gri ths, Nils Sjard-Schulz, Ste an Meyer, Nancy Alexander,Katja Jobes and Romilly Greenhill or their help ul comments. Particular thanks are due to Alex Wilks (Eurodad) and SarahMulley (UK Aid Network) or their extensive editorial input.

3

About this report

Country Title Source

Cambodia Making aid more e ective? An independent www.actionaid.orgassessment o accountability and ownershipin the aid system

Honduras Avances de Honduras en armonizacin de la Cooperacinwww.trocaire.orgInternacional despus de la Declaracin de Paris:Una evaluacin desde la perspectiva de sociedad civil

Mali Dclaration de Paris, encore de lingrdient pour assaisonnerwww. econg.orgla oire des chats marchands au Mali ?

Mozambique Moambique: Uma anlise independente www.trocaire.org.ukda apropriao e prestao de contas no sistema www.ca od.orgde ajuda ao desenvolvimento

Nicaragua Consideraciones sobre la E ectividad de la www.trocaire.orgCooperacin Externa o cial www.ca od.org.uk

Niger Quelle e cacit de laide publique au dveloppement au Niger?www.rodaddhd.orgEtude indpendante pour une approche citoyenne de lAPD

Sierra Leone Old habits die hard: Aid and accountability in Sierra Leonewww.eurodad.org

Overview Report Turning the Tables: Aid and accountability under the Paris Frameworkwww.eurodad.org


4/60

ContentsAbout this report............................................................................................................................................................................3Acronyms........................................................................................................................................................................................5Executive summary........................................................................................................................................................................61. Introduction...............................................................................................................................................................................12

The Paris Declaration: progressive but limited ..............................................................................................................13Beyond o cial views: this reports contribution.........................................................................................................13Accountability and ownership: the vital oundations................................................................................................14

2. Delegating policy decisions, opening ownership...............................................................................................................16Interpreting ownership: The Paris Declarations limited de nition......................................................................16Donors und their own priorities........................................................................................................................................17Donors hold upper hand in aid negotiations................................................................................................................18Continuing conditionality...................................................................................................................................................19

3. Citizen participation in policy decisions..................................................................................................................................24

Policy dialogue: high costs, what gain? ..................................................................................Policy dialogue: limited scope or participation ....................................................................Supporting citizens groups to enhance accountability ................................ ............................

4. Falling in line: Do donors back national priorities?...........................................................................................................32Using country systems: donors still reluctant...............................................................................................................32Budget support: on the rise?..............................................................................................................................................33Project aid: a constant presence.........................................................................................................................................36Predictably precarious aid..................................................................................................................................................38Technical assistance still supply driven...........................................................................................................................42

5. Mutual accountability requires citizens engagement.....................................................................................................45Country level actions.........................................................................................................................................................45Policy mechanisms or mutual accountability.............................................................................................................46Insu cient donor transparency.........................................................................................................................................48Governments can do more to in orm their citizens....................................................................................................49CSOs push country level accountability..........................................................................................................................50International level actions also required.........................................................................................................................51

6. Conclusion and recommendations............................................................................................................................................53

DisclaimerThis report is a Eurodad paper, but the analysis presented does not necessarily refect the views omember organisations. The report was nanced by the UK Department or International Developrovided unding while giving Eurodad complete reedom to determine its research approach and ed

unded this research in order to increase the contribution o the perspectives o southern civil socigovernments to the aid e ectiveness process.

4


5/60


ADB: Asian Development BankAER: Aid E ectiveness ReviewA DB: A rica Development BankCABEI: Central American Bank or Economic IntegrationCDC: Council or the Development o CambodiaCDCF: Cambodia Development Cooperation ForumCIDA: Canadian International Development AgencyCSO: Civil Society OrganizationDAC: OECD Development Assistance CommitteeDANIDA: Danish International Development AgencyDFID: Department or International DevelopmentEC: European CommissionENCISS: Consultancy or Enhancing the Interaction and Inter ace between Civil Society and the State to Improve Poor

Peoples LivesEURODAD: European Network on Debt and DevelopmentFECONG: Federation o Collectives o NGOs in MaliGNI: Gross National IncomeHDI: Human Development IndexHIPC: Heavily Indebted Poor CountriesIDA: International Development AssociationIDB: International Development BankIMF: International Monetary Fund

NGO: Non-Governmental OrganisationODA: O cial Development AssistanceOECD: Organisation or Economic Co-operation and DevelopmentPAF: Per ormance Assessment FrameworkPARPA: Action Plan or the Reduction o Absolute PovertyPEPFAR: The United States Presidents Emergency Plan or AIDS Relie PES: Economic and Social PlanPETS: Public Expenditure Tracking SurveysPIU: Project Implementation UnitPPE: Priority Poverty ExpendituresPRGF: Poverty Reduction and Growth FacilityPRSC: Poverty Reduction Support CreditPRSP: Poverty Reduction Strategy PaperTA: Technical AssistanceUK: United KingdomUN: United NationsUNDP: United Nations Development ProgrammeUS: United States o AmericaUSAID: United States Agency or International Development

WB: World Bank

5

Acronyms


6/60

Executive summary2008 is a critical year or evaluating how aid is helping tackle global poverty and inequality. Three yeand recipients signed up to the Paris Declaration on Aid E ectiveness an historic agreement to improvtime to review progress. Have donors per ormed on their pledges? And is aid becoming more e ective

or impoverished people?

This report is the result o research in seven aid recipient countries, conducted by southern and northorganisations, coordinated by the European Network on Debt and Development. This report ocuses ontwo principles o the Paris Declaration ownership and accountability. These principles are the bedrobut the area where least attention has been paid. While both donors and recipients have responsibilitiemore e ective, this report concentrates on the responsibilities o donors to make sure aid contributes to achallenges aced by developing countries.

The country case studies show that some welcome steps are being taken by donor and recipient governm

progress is patchy and partial. A broad understanding o democracy and development is largely absent context. Donors are not doing enough to respect or support recipient country ownership over the develoToo o ten national development strategies are devised by donor consultants or sta with insu cient regpolitical realities. Donors still nd ways to und their priorities, selecting their avoured issues rom nattaching conditions that push their policy priorities. Although donors are beginning to coordinate betin their provision o budget support, they are undermining government ownership by loading budget smany conditions.

Donors need to do more to support meaning ul participation by parliaments and civil society in policy

in the way aid is delivered have opened up new spaces or dialogue about public policies. However outhat the complex array o policy dialogue ora did not necessarily mean more or better public debate aboCitizens are marginalised rom important decisions. They need much better in ormation and opportunand monitor decisions and implementation.

There is too much ocus on technical expert discussions between the executive branch o government risk diverting attention rom the public arena, where parliaments, citizens and the media can more easisociety groups should always be o ered a seat at the table and policy dialogues need to eed into poliDonors must step back rom trying to manage policies to create space or genuinely democratic ownsome innovative examples o donors unding CSOs to hold their governments to account, or example

und in Honduras, however, most donors clearly need to improve the ways they support CSOs.

Too little donor aid is provided through national systems, with parallel management and nancial arranused. There has been some progress in using more programme-based approaches to deliver aid, notably ibut overall donors continue to spend the majority o their money on discrete projects. Even in Mozthe proportion o aid being spent on projects has decreased, the actual number o projects has increa

ragmentation.

Technical assistance continues to be the black hole o aid, with scepticism rom developing country g

civil society organisations alike about whether it builds sustained capacity, and little evidence that it haresponsive to needs as a result o the Paris Declaration commitments. A signi cant amount o aid is spnearly hal o aid to Cambodia was technical assistance, and more than a third o aid to Honduras.

6


7/60


Some donors are spending an increasing share o their aid as sector and budget support. However, overall, generalbudget support has remained stable at around 5% o global fows. The amounts being spent through budget supportvary signi cantly across our case study countries. Six countries received just one tenth or less o their aid in this way;Mozambique received nearly hal . Recipient governments need to improve their public accountability and clamp downon corruption as more money is channelled through their systems. Donors are rustrating the potential o budget supportby tying it to multiple detailed per ormance conditions that the recipient government must comply with.

Aid payments are still unpredictable, disrupting development planning and implementation by recipient governments.In 2006, the World Bank only disbursed hal o its committed aid to Cambodia, and in the same year only hal o all donoraid committed to Sierra Leone was disbursed.

An accountable aid system is still a distant prospect, but some positive actions are being taken. The Cambodiangovernment has begun publishing its own report on donor per ormance. A donor database and annual review o donor

per ormance in Mozambique are another positive example o what donors and recipient governments can do jointly toincrease donor accountability. But the Paris Declaration pledge that donors and recipients should become mutuallyaccountable is still aspirational. Donors remain reluctant to make pledges which limit the control they enjoy throughholding the purse-strings o aid payments. There are still very ew examples o contractual arrangements or aid whichcorrespond with the goal o mutual accountability between donors and recipients.

Accountability to citizens is thwarted by insu cient donor and recipient government transparency, a lack o mechanismsor citizens and parliaments to hold donors and their governments to account, and weak civil society capacity. Civil

society organisations are taking some steps to make aid more accountable, but in many countries they still need support

rom outside. They must continue to organise at national levels, and link across borders to compare in ormation anddetermine how they can exchange skills and strengthen links to monitor aid and increase its e ectiveness.

7

Donors are progressing in some areas, but all can improve their operations.

Some donors have implemented initiatives to improve aid implementation and open space or recipients infuence.For example Irish Aid provides support to citizens audits in Honduras, the World Bank has opened up its countryassistance strategy to discussions with civil society and the French government has maintained a small unding line

or community initiatives in Mali. The report shows many examples o improving predictability the EC and DFID

have made commitments over longer time rames, greater openness such as through the Mozambique donordatabase - and increased fexibility.

However, the French government is particularly infexible in the programme support it provides to the Nigergovernment and there is a lack o transparency about the real amounts o money provided to Mali through thedi erent French agencies. USAID imposes its own unilateral rules and procedures in Mozambique, Mali andHonduras. The European Commissions attempts to support civil society in Sierra Leone have yielded ew resultsbecause o its di cult procedures. The World Bank and Inter-American Development Bank are not using the nationalprocurement system they helped establish in Honduras. DFID and the World Bank are unding implementation

secretariats in key areas o Sierra Leonean policy making, bypassing government ministries. Predictable aid is stillnot orthcoming rom many donors, with the World Bank determining its spending on a yearly basis.


8/60

The o cial Paris Declaration review process is welcome, yet insu cient to create the major changes requl l its potential to trans orm lives across the world. This report will complement o cial analysis and

debates be ore, during and a ter the High Level Forum in Accra on aid e ectiveness in September 200to urther pledges to raise the per ormance o donors, recipients and civil society groups in making aidand e ective.

Recommendations

Donors must respectrecipient country ownershipo the development process; Donors must greatlyimprove the predictability o their aid and deliver it in ways that help build nationa

systems;

Donors and governments shouldagree binding and transparent contracts or aid. Aid terms must be airly andtransparently negotiated with participation o and accountability to poor people;

Donors and recipient governments mustradically improve the accountability o aid; Recipient governments shouldstrengthen oversight institutions and improve public nancial management

and accountability systems.

8


9/60


Case study pro les and ndings1

9

CambodiaTotal aid:US$ 529 million

Aid per capita:US$ 37

GNI per capita:US$ 480

Aid as % o GNI:8%

HDI Ranking:131/177

Top 5 donors:Japan, A DB, USA, WB, France

Top 5 donors to government sector:Japan, ADB, UN, WB, USA

Main research ndingsThe Cambodian government is asserting more

leadership on aid. It has elaborated a multi-yearnancing ramework and has infuenced donors by

publishing an Aid E ectiveness report. Budget supportremains marginal and the government nancialmanagement systems are in requently used.

Transparency and accountability are low. Donors donot provide accurate in ormation on aid fows, theparliament is completely sidelined and the role o CSOsis still very weak in monitoring aid fows.

HondurasTotal aid:US$ 587 million


GNI per capita:US$ 1,200

Aid as % o GNI:7%

HDI Ranking:115/177

Top 5 donors:Japan, WB, Spain, IDB, US

Top 5 donors to government sector:WB, IDB, EC, UN, CABEI

Main research ndingsThe Honduran government has not assumed muchleadership on aid. A very small and decreasing amounto aid is channelled through government systemsand budget support represents a very small share o aid. Aid predictability is low as a consequence o highconditionality.

Donors provide little in ormation on development aidand both donor and government evaluations are hard

or civil society groups to obtain. The government isaccountable mainly to donors and the parliament playsonly a minimal role in managing development aid.

MaliTotal aid: US$ 825million

Aid per capita: US$ 59

GNI per capita: US$ 380

Aid as % o GNI: 13%

HDI Ranking: 173/177

Top 5 donors: EC, WB, France, Netherlands, US

Top 5 donors to government sector: WB, EC, France,A DB, Netherlands

Main research ndingsThe Mali aid picture shows a country in transition. Theamounts o aid on budget have increased up to 33%and, although project support still accounts or 83%

o total aid, budget support is growing. CSOs are alsoplaying an increasingly important role although noconsultation process accompanied the elaboration o the PRSP.

There is limited interaction between Malian CSOs andthe government or donors. In addition the work o CSOsis jeopardised by di culties accessing in ormation romboth donors and government.


10/60

10

MozambiqueTotal aid:US$ 1,611million



Aid as % o GNI:23%

HDI Ranking:172/177

Top 5 donors:WB, EC, USA, A DB, Sweden

Top 5 donors to government sector:WB, EC, A DB, UN, UK

Main research ndingsAid to Mozambique has increased and budget supportis now at 33.7%. The government is playing a moreactive role in dialogues with donors. Despite this thegovernment still lacks technical capacity to infuence

outcomes and doubts persist about whether this aiddependent government can assert itsel e ectively.

There is a lack o communication between government,parliament and citizens on aid issues so CSOs nd it di -

cult to scrutinize the budget and to access in ormationon aid fows rom both the government and donors.

NicaraguaTotal aid:US$ 733million



Aid as % o GNI:14%

HDI Ranking:110/177

Top 5 donors:Germany, Spain, IDB, WB, Japan

Top 5 donors to government sector:IDB, WB, EC, Japan, Sweden

Main research ndingsThis report shows improvements in CSO involvement inaid. CSOs have played an important role or some time,although they are marginalised rom some processes.Government ownership o aid is low and very little aidis provided as budget support.

Conditions are widely applied and large numbers o project and technical assistance missions representa signi cant administrative burden. The report alsohighlights that the new administration which came topower in January 2007 has not continued to implement

a promising aid management policy introduced by itspredecessor.

NigerTotal aid:US$ 401million



Aid as % o GNI:11%

HDI Ranking:174/177

Top 5 donors:France, WB, EC, Japan, USA

Top 5 donors to government sector:WB, EC, France, UN, Japan

Main research ndingsVery little progress has been made on any o the con-cepts put orward by the Paris Declaration and bothdonors and government have shown little willingnessto ul l their Paris Declaration commitments.

Democratic national ownership is still an aspiration and

the government is more accountable to donors than toits own citizens, meanwhile donor accountability is stillocused outside the country.

CSO participation in the aid system is very low and it isdi cult or them to nd unding, especially or thosewho do not work jointly with international CSOs.


11/60


11

Sierra LeoneTotal aid:US$ 364million



Aid as % o GNI:26%

HDI Ranking:177/177

Top 5 donors (2006):UK, EC, WB, A DB, US

Top 5 donors to government sector: N/A

Main research ndingsOwnership o development aid is very low in SierraLeone. Government capacity is very weak and its weightin aid negotiation processes very low. Several spaces

or dialogue exist, but the government lacks enoughexpertise to participate actively in all o them.

Donor aid is very unpredictable which has causedmajor problems or the government, especially whencombined with the conditionality burden. CSOs roles arevery limited and in ormation fows primarily betweendonors and the government, excluding citizens.


12/60

1. Introduction

There is still a large gap between the virtual universal acceptance of the ParisDeclaration principles and translating this into practice. Honduran case study

Donor countries have repeatedly committed to increase the amount o their aid to poorer countries. Mare proceeding only very slowly to meet these commitments.2Donors and recipients have also made a series o pledges improve how aid is delivered and to ensure more reaches the people that need it most. 2008 is a key year e ectiveness o aid, with a series o o cial reviews taking place, leading to a major con erence in Gha

In 2005 aid donors (richer country governments and multilateral agencies) and aid recipients (pogovernments) signed a historic set o commitments - the Paris Declaration on Aid E ectiveness. Threecommitments were made; it is time to ask some questions. Have donors per ormed on their pledgesdeclarations principles and targets the right ones to make a di erence or the people in poor countries inmoney is raised and spent?

Box 1 -The Paris Declaration commitments or e ective aid

The March 2005 Paris Declaration sets out ve main principles or improving aid delivery. These are

Ownership:Developing countries should take the lead in deciding their own policies and donors shoulthat and give them the space to do so.

Alignment:Donors should stop creating parallel systems or delivering aid and should work throughbudgetary, procurement and accountability procedures.

Harmonisation:Donors should reduce the aid transaction costs or recipient governments by doing jointreducing the number o visits they pay to the country, do more programming jointly and jointly reducerequirements they put on developing country governments.

Management or results:Both donors and developing country governments should put in monitoring andcollection systems to ensure that aid contributes to concrete results on the ground.

Mutual Accountability:Donors can hold developing countries to account or their per ormance but devcountry governments should also be able to hold donors to account or whether they have delivercommitments.

This global commitment signed by 35 donor countries and agencies, 26 multilateral agencies and 78 creceive aid, codi es practices that were already being tested by a number o donors and developing co3 TheParis Declaration includes 12 monitorable targets which parties have agreed to meet by 2010.

12


13/60


The Paris Declaration: progressive but limited

The Paris Declaration aspires to make aid better at contributing to the development o poor countries. According to theOECD the Paris Declaration lays down a practical, action-orientated roadmap to improve the quality o aid and its impacton development.4

The Paris Declaration is welcome, and is an important step towards establishing a progressive international consensuson aid. However, the Declaration is not su cient to make aid work in the long term both donors and recipients needto go urther. CSOs and some governments are concerned that the Paris Declaration targets omit certain key issues suchas conditionality and are too vague on others such as tied aid. Furthermore, some o the targets, such as the one onownership, are too narrowly de ned. The ocus on targets risks depoliticising aid, trying to solve largely political problemswith technical tools.

Citizens groups and parliamentarians are largely excluded both rom the Paris Declaration ramework and itsimplementation. But the provision o aid does not happen in a vacuum - it is not possible to isolate the donor-recipientrelationship rom the people the aid money is supposed to assist. The complex processes in the aid business interact with(o ten nascent) democratic processes in developing countries. Ideally aid will have a positive e ect on those democraticprocesses, but delivered in the wrong ways, aid can do harm as well as good. As donors participate more actively in thepolitical economy o developing countries, or example negotiating policies with government representatives, they riskdisplacing parliaments and citizens in policy-making processes.5

Beyond ofcial views: this reports contribution

This independent report brings people and politics back into the discussion. Using the voices o civil society groups andgovernment o cials in aid recipient countries it examines the relationships between donors and aid recipient governmentsand between developing country governments and their citizens. The report asks whether the Paris Declaration has helpedcorrect the imbalance o power between donors and recipients and to what extent recipient governments relationshipswith citizens and civil society organisations have improved.

The report is based on core research using a common terms o re erence carried out in 7 countries (Nicaragua, Honduras,Cambodia, Mozambique, Sierra Leone, Mali, and Niger). In addition it draws on other case study research carried out by

the A rican Network on Debt and Development,6

Ox am (Mali and Malawi), Ibis (Ghana) and Cordaid (Ghana, Zambia andUganda) which asked similar questions. The research prioritises the voices o civil society and government representativesrom developing countries. This puts the ocus back on the people who are a ected by aid, to ensure that their perspectives

are heard, not just those o donors.

It is beyond the scope o this research to judge precisely whether the Paris Declaration targets are being met or whetheraid is becoming more e ective at reducing poverty and inequality. This report does, however, set out evidence on thechallenges donors ace in adhering to Paris principles and commitments on ownership and accountability, and givesexamples o progressive steps being taken by some donor agencies.

13


14/60

Limitations o the Paris Monitoring Survey

This year there will be a number o o cial reports produced by the OECD Development Assistance Co

and its membership. One key product is the Paris Monitoring survey which ocuses on the progress developing countries towards the twelve targets o the Paris Declaration.7

The o cial process or monitoring compliance is limited, and does not provide a ull picture o doCSOs are sceptical o the current set o indicators and monitoring data. Some indicators are constrwhich make it di cult to assess donor and government per ormance, and there are strong indicationsdonors and governments have provided inaccurate data. The o cial monitoring system makes it di cult per ormance o individual donors.8 The current monitoring process or the Paris Declaration is asymmetric dmonitor themselves, while recipients are monitored by the World Bank and others.9 World Bank assessments areused to measure the targets on ownership, public nancial management and results.

The impact o the Paris Monitoring survey10will be limited by the act that the 2006 baseline su ers rom havibeen politically negotiated at country level. Interviews with donor o cials in Cambodia or this study cdonors are able to fatter their own per ormance. One donor o cial observed or example, that donorclaim that they are undertaking joint research simply by adding other donors logos to their own reporeduction in transactions costs or the recipient government. And the Nicaragua country report producto this study reveals that the government would pre er to adopt a more restrictive de nition [on coordinassistance] than the one agreed by the donors. I the rigorous de nition provided by the survey guidanapplied, no current programmes in Nicaragua would quali y as co-ordinated under government leaders11

14

Accountability and ownership: the vital oundations

This report ocuses on the Paris Declaration principles o ownership and accountability. These two oundation o relations between donors and recipients and or domestic power relations. They are also

society has a unique perspective and a distinct contribution to make. And although these principles are tthe current aid paradigm they are also the areas where there has been least attention and measurement o

The civil society organisations behind this report start rom the premises that: Aid is not a gift that rich countries give to poor countries. It comes bundled with donor pr

knowledge this creates ownership obstacles as donor infuence can undermine democratic processocuses on the impacts o aid on democratic processes and the space available or southern civil s

engage with policy making, implementation and monitoring. The concept of mutual accountability between donors and recipient governments as seen in t

undamental inequality in power between the two parties. Donors are rarely held accountable or wpeople in poverty. There is no way or developing country governments to seek redress against a donoquality aid. Citizens in poor countries have even less recourse to holding donors to account. Aid that iand accountable also places barriers in the way o domestic accountability o governments to their ci

Accountability is essential or aid e ectiveness and equitable development. Strong accountability mecto enable poorer people, the intended bene ciaries o aid, to hold donors and their own governments


15/60


ghting poverty and inequality and delivering results on the ground. When donors are unaccountable, aid is likely to beless e ective. And when donors impose their priorities and policies on recipient countries, they undermine the democraticaccountability o governments.

Reductions in poverty and inequality are most likely to be sustained in the long term i governments in developingcountries are accountable to their citizens, but aid can o ten skew domestic accountability towards donors, crowding outlocal accountability between states and their citizens. To be accountable to their citizens, governments must have thespace to make their own policy decisions donors must not dictate policy. They also need to be able to make in ormeddecisions about aid, and to hold donors to account or their commitments.

Donors can support democratic accountability both by changing their own behaviour ( or example through improvingtransparency) and by supporting local accountability mechanisms including parliaments, independent public oversightinstitutions and CSOs. CSOs have a crucial role to play in holding both governments and donors to account or the

e ectiveness o aid. Accountability at all levels requires accurate in ormation about donor behaviour and decision-making,and about the impact and e ectiveness o aid.

This report provides up-to-date evidence and analysis on the extent to which current aid e ectiveness commitments havechanged o cial practices and helped redress the unbalanced relationships between donors and recipients

Mutual responsibilities

Under the Paris Declaration both developing country governments and donors have committed to improve aid e ectiveness.

But it is important to recognise that donors hold the purse strings and have disproportionate power. With power comesresponsibility, and in this report we ocus primarily on donors responsibilities to make sure aid addresses the challenges

aced by developing countries.

Civil society organisations in developing countries have broad concerns about democracy and transparency that go arbeyond aid. Indeed our case studies highlight several areas where developing country governments are doing too little toenable citizens to claim their rights. Lack o political commitment to reducing poverty, clientelistic politics and corruption,weak and divided administrations with little capacity to implement poverty reduction programmes, poor budgeting andaccountability procedures and poor relations with civil society are among the points raised by case study researchers.

The Paris Declaration is, however, primarily about aid - a eld where the aid donors take the major decisions. The changesthat donors need to undertake to meet their commitments can be made by the government agencies that deal with aid.In the case o recipient governments, the changes that are required go to the heart o everything that they do. These aredeep political challenges that will not be solved just by aid, and the aid- ocused ora o the OECD DAC are not the rightplace to resolve them. The likelihood o these challenges being met by governments can however be a ected eithernegatively or positively by aid.

The ocus on donors in this report does not deny the responsibility o developing country governments to ul l thecommitments that they have made and in this report we highlight speci c areas where more needs to be done. All o the

CSOs involved in this study continue to promote democracy, good governance and transparency in southern countries,and to hold their own governments to account.

15


16/60

2. Delegating policy decisions,opening ownership

This section discusses the Paris Declaration de nition o ownership and examines to what extent it is beiParis Declaration model o aid, recipient countries are meant to take the lead in determining and impleto reduce poverty and promote sustainable development. This is expressed as claiming ownership over tprocess.

In the Paris Declaration ownership is seen largely as a recipient government responsibility, but donors caby imposing their own priorities and policies. Our research shows that piecemeal progress has been madeare still prescribing solutions or poorer countries.

Interpreting ownership: The Paris Declarations limited de nition

Ownership is a core principle o the Paris agenda, and requires action by donors, governments and civParis Declaration donors have said that they will respect partner country leadership and help strengtheto exercise it. In turn, developing country governments will take the lead to develop operational nationstrategies which are linked to medium-term nancial plans. They also pledge to coordinate aid at all levwith donors and encouraging the participation o civil society and the private sector.12

These commitments by donors and recipients are meant to give developing country governments morhow aid is used as well as over policy making and implementation. CSOs do not always support currpolicies and priorities and need to be able to engage in debates with governments to advocate policies th

experiences and perspectives, and hold to hold governments to account or policy implementation. Govspace is vital to the model o democratic accountability that CSOs promote. When donors ail to take othey also undermine CSOs ability to play their role in development. For national ownership to becomemust stop imposing their own policies and priorities in order to open space or recipient governments todecisions in dialogue with their citizens.

The Paris Declaration indicator used to measure ownership is the presence o a good quality and opedevelopment strategy (as judged by the World Bank).13This ocuses entirely on the recipient governments responsibiliand ails to recognise the steps donors must take to create space or recipient governments to ul l thes

The Paris Declaration indicator, by ocussing on the Poverty Reduction Strategy Paper (PRSP)i]

and associated processes,also reduces ownership to a technical matter which does not recognise the contested interests and nego s in domestic political decisions. The PRSP process o ten seems to be about consultation to generaexternally driven agendas, rather than about political leadership rom recipient country governments bengagement with citizens. ii]

Interpretation o ownership is currently donor-driven and is centred on developing country governmenmust be broadened to include the concept o democratic ownership whereby parliaments, civil societykey drivers o public policies. Civil society representatives interviewed in many o the case studies ecownership over policy-making to be embedded in national democratic processes. One CSO representativcomplained that there are so many policies in Sierra Leone that are not envisioned locally, that are extedonors and development partners.14

16

i]PRSPs have di erent acronyms in each

country. E.g. it is called the PARPA in

Mozambique and CSLP in Mali. To avoid

con usion it is re erred to as the PRSP

thorough the report.

ii]Whit eld makes a use ul distinction in

their orthcoming book between ownership

as commitment by the developing country

(to implement a policy, whoevers policy it

is) or ownership as control over the policy

making process. Whit eld, L. (Ed.) (Forth-

coming)The new Politics o aid: Barriers to

Ownership in A rica. Ox ord University Press


17/60


Donors und their own priorities

In all the case studies we examined, the PRSP or similar national development strategy is a ocal point or donors deliveryo aid and their discussions with the government about poverty plans. Developing countries had to develop PRSPs as acondition to access debt relie under the Heavily Indebted Poor Countries (HIPC) initiative. These have been overwhelminglydonor driven, and dra ted in some cases by donor-paid consultants. The remarkable similarity o PRSPs and the processessurrounding them rom Honduras to Mali to Cambodia illustrates the dominance o donors in their evolution.

The recent elaboration o Nigers second PRSP is an illustrative example. In March 2007, ollowing a request rom the NigerPRSP secretariat or help rom donors, teen Niger government representatives few to Washington DC where they metWorld Bank, UNDP, EC, Belgian and IMF o cials or a working session to dra t their second PRSP. This was considered acheaper option than fying World Bank consultants to Niamey. Following this, the World Bank contacted a Senegaleseconsultant who had worked on his countrys PRSP to support the Nigeriens to complete their strategy document. Thisconsultant was brought to Niger, nanced by UNDP to nish dra ting the strategy. Despite their level o involvement, donorsthen criticised the document or being unrealistic, not operational and or not having enough long-term vision.

A requent donor complaint in all the case studies was that PRSPs amount to shopping lists o actions to address povertyand that there is little or no prioritisation. Our case studies suggest that this tendency may be driven by both donors andgovernments. Donors may not promote prioritisation because shopping lists allow them to und their priorities whilealso claiming to respect country ownership. Governments ace similar incentives to avoid a real debate about its policyprogrammes with either donors or citizens.

In Sierra Leone, all aid is classi ed in the Government Development Assistance Report as being under one o the threepillars o the PRSP. It only has to be named as alling within one o the broad de nitions. In Cambodia, one donor o cialcommented sardonically that their PRSP is so broad that only i donors built hotels on the moon would they struggle to

nd a PRSP hook to align to.15

The lack o a clear development strategy in Honduras means that donors can de ne in their capitals the sectors they willwork on, and the projects thus respond more to these orientations than to the needs or the country.16 In 2006, the WorldBank and the European Commission determined their aid priorities and strategies by sending external consultants and sta

rom headquarters on short missions to the country. In this di cult situation, donors could carry out more needs analysis

with di erent stakeholders to make their programmes more responsive.

In Niger the French government has begun tying its aid to very speci c budget lines as a means o prioritising its spending.One government representative argued that the very targeted French budget support eliminates our room or manoeuvre we have no latitude at all.17 For example in 2007, the French government selected speci c lines o the health budgetthat their nance was directly tied to.

Donor priorities can also skew spending at the country level. Special targeted health unds or example, whilst e ective atraising money or speci c diseases, do not necessarily address the variety o health needs. For example, our research romMozambique shows that The United States Presidents Emergency Plan or AIDS Relie (PEPFAR) dwar s spending on otherhealth priorities. PEPFAR spending on HIV/AIDS in Mozambique in 2006 was nearly US$70 million18 or 125% o the totalgovernment health budget or that year.

17


18/60

Box 2 -Donor driven ownership in Mali

The donors do not support one plan they keep bringing their own innovations which drag the planne

implementers in all di erent directions. I you look at PRODEC (Decade or Development o Educatdonors pledged to support, you can easily see that the content and execution keep changing to suit thesprojects The government needs to choose one path and stick to it: whatever donors come should ollpath.

Malian CSO Representative

In theory, nearly all the donors in the education sector have aligned their programmes around the Maligovernments ten year national education plan (PRODEC: 2000-2010) and its joint expenditure prograhas been divided into three phases and is nanced by the central government, municipalities and about

donors. The reality is very di erent. Donors say they have aligned the objectives o their unding to tin the Malian plan, but they have very di erent ideas o how to reach these objectives. Donors bring tplans or how to achieve these objectives, which they want to see prioritised, pulling the government directions and undermining government leadership. This is despite the establishment o a joint educatgroup, currently headed by the French to ensure greater alignment and harmonisation by donors.19

18

Donors hold upper hand in aid negotiations

We have become aid economies; we no longer know how to re ect on the solutions we need to put in place in our countries.

Mahaman Sani Adamou, Niger

Recipient governments rarely take the lead in determining the types o aid that they would like. There reasons why this is happening. Lack o recipient government capacity, poverty and dependency on aidFindings rom the case studies illustrate that recipient governments are only negotiating around the edgeit comes to improving the quality o the resources on o er.

In both Honduras and Niger, the lack o government administrative capacity reduces the ability to negot

I the government does not bring proposals to the table, it is all too easy or the donors to decide on howHonduras case study argues that the lack o communication between the di erent government departmwith aid, make coordination amongst donors very di cult.20

Poverty and dependency on aid is one reason why developing countries eel they cannot negotiate more sLeone, the government has never turned down aid because it did not like the terms. Most intervieweesincredulously when asked i the government had ever re used aid. One civil society representative said we are so poor that i we question the conditions, we will lose the money, () we have so emphasised thare poor that we do not ask them simple questions.21 Another even claimed that citizens would be outraged and woul

not understand such a strategy given the level o need in the country.


19/60


In a ew countries, recipient governments have tried to be more assertive. Although the Cambodian government isnot known to have re used aid rom any o cial donor, it has substantially modi ed projects in certain instances. TheMozambique study identi es one recent case where one donor wanted to ollow its own rules and procedures ordisbursing unds and tried to get out o an aid delivery agreement in the health sector. The Ministry o Health re usedand insisted it ul l the multi-donor agreement. The donor then sought support rom the Department or InternationalCooperation which put pressure on the Health Ministry to capitulate, despite protests rom other donors.

The Nicaragua study presents a di erent picture. The current Sandinista government wants to set its own priorities andthere ore renegotiate many projects that were agreed with the previous administration. The government is assuming aleadership role, but relations between donors and the government are poor. Concerns about corruption and increasedclientelistic politics contribute to a lack o trust. As Nicaragua looks to Venezuela as an alternative source o nancing, itcan a ord to disregard other donors concerns. Many civil society organisations are extremely critical o the direction theSandinista government is taking. Funding rom Venezuela will not be registered on the budget despite the legal obligation

or this to happen, making it particularly di cult to track and monitor. One donor representative argued, however, thatthere is a positive angle to the governments change in attitude, saying, it is good that this is happening, because in theprevious government we did and undid things as we wished. Now it is not the case, now we have a partner. The partner,the government, may be wrong, but it is a real partner.

Continuing conditionality

Conditionality has been the subject o a contentious debate between donors and recipient countries. The World Bankrecognised in 2004 that conditionality is not necessary i there is true country ownership, and that it is not likely to be

e ective in the absence o ownership.23

However our case studies suggest that conditionality is still widely used.

19

2000 2001 2002 2003 2004 2005 20060

10

20

30

40

50

60

Sierra Leone Mozambique Nicaragua Mali Niger Cambodia Honduras

ODA as % of Gross National Income

Fig. 1Aid dependency in our case study countries

Elaborated by Eurodad with data rom the OECD online database


20/60

Donors committed in the Paris Declaration todraw conditions, whenever possible, rom a partners national develostrategy or its annual review o progress []. This commitment does not clari y when it should be possible to do sis not backed up with indicators or targets. And even i the policy area which the condition addresses inational development strategy, donors still prioritise which conditions to include in aid agreements (see above).

The increase in use o budget support aid channelled directly to government budgets (see section 4 oo aid modalities) is o ten cited as a key means to acilitate greater government ownership. Yet conditshrinking the political space that budget support should provide. Budget support has come hand in haintrusion by donors in government policy making through ever more detailed matrices o policy cper ormance indicators. These are usually laid out in the Per ormance Assessment Framework (PAF) matrix attached to budget support. Recent Eurodad research shows that donors come together withconditionality shopping list and the result is o ten that rather than a matrix with ewer and clearer co

is the sum o all donors wish lists. The result is a jumble o di erent types o conditions.24 Despite the importance thatPAFs are assuming, citizens and parliaments are generally excluded rom their ormulation.

The case studies show that power imbalances and weak capacity limit governments ability to negotiatconditions. A high-level representative rom the Niger Treasury said: we discuss the nature o the indicbut these are unequal discussions: we do not have a real margin or decision. The high aid depende25 o somerecipient countries shi ts the balance o power to donors. As one Niger o cial argued we need the moaccept per ormance indicators even i we dont think we will be able to meet them. These negotiations aunequal as we need the money.26

In Sierra Leone, the Per ormance Assessment Framework linked to budget support is rst negotiated amwith national representatives not invited to the table. Commenting on the process, DFIDs Head o Operinitially the donors do a dra t to agree on the conditions, and then these are taken to the government an27

The Ministry o Finance is able to negotiate in terms o timing but not o substance. This document in Sierra Leone, so parliamentarians and civil society groups are unaware o its content and the rangeincludes or receiving aid.

20

Box 3 -Malawi: donor coordination, but not around conditionality28

In Malawi DFID, the European Commission, Norway, Sweden and the World Bank combined their coa Per ormance Assessment Framework.29 The indicators in this document refect the di erent pre erences o thvarious donors involved and contain conditions related to both speci c desired poverty reduction oparticularly rom the EC and to policies that supposedly should lead to those desired outcomes nthe World Bank.

The proposed World Bank Poverty Reduction Support Credit (PRSC) has a number o conditioncontroversial economic policy conditions like privatisation o part o the state marketing board, ADMrevealed that there was quite intense government negotiation on the indicators that the World Bank wto make part o the Per ormance Assessment Framework, with some being substantially watered dow


21/60


21

original proposal, notably private sector involvement in the distribution o subsidised ertiliser. Disagreement overthis at one point led the World Bank to threaten to withdraw.

The introduction o a joint Per ormance Assessment Framework has not streamlined the overall number o conditions.There are 29 o cial indicators but this translates into a much larger number o actions that the government musttake. The rst indicator, or example, requires Malawi to be on track with the IMF PRGF meaning that the multiplequantitative and structural conditions o the IMF programme are all subsumed under one indicator.

Donors also continue to link budget support to IMF conditions, which contradicts even the weak commitment made inParis to draw conditions rom national development strategies. A recent evaluation o budget support cautioned againstimposing a large number o conditions,30 and against tying budget support conditions to IMF benchmarks. However ourcase study research shows little progress in this regard.

- In Honduras, or instance, budget support unding is linked to conditions rom the IMFs PRGF, the World Banks PRSCas well as other donors conditions.31

- The tendency to load budget support with conditions has also been observed in Nicaragua, Niger and Sierra Leone. Arecent evaluation by SIDA in Nicaragua ound that conditionalities make budget support similar to an IMF programme() conditioning this new modality o nancial assistance directly to the approval o the IMF puts donations orsocial expenditure and public sector programmes () at risk.32

- In Mozambique and Ghana, there has been some progress in reducing the number o conditions linked to budgetsupport.

Box 4 -Budget support and increasing conditions in Nicaragua

In the two years that we have received budget support what has been created is a collage o conditionality that wedo not manage to reduce or minimise, to really convert them into government commitments. Each one came in withtheir own conditions. The World Bank wanted their conditions, then others such as the European Commission arrived with its own criteria. Then suddenly it became a di cult negotiation. Sometimes the need or income is also so great that it causes problems or your ability to negotiate.

Mauricio Gomez, Ex Secretary or External Cooperation, Nicaragua

One incremental step orwards would be to link disbursements to progress towards particular poverty outcomes asopposed to policy inputs. Disbursing aid against development outcomes encompasses both the potential to increasegovernment ownership and to establish clearer relations between development programmes and their impact onpoverty reduction.33 This is, or instance, the principle underlying the new outcome based conditionality employedby the European Commission.34 In Mali or example, the EC is tying its budget support to outcome based indicatorsaround health and education. This incremental approach would only help i it replaces rather than adds to existing policyconditions, otherwise it risks worsening the cumulative impact on government policy making. There are also someimplementation challenges associated with outcome based conditions such as measuring attribution and includingqualitative as well as quantitative outcomes.

Policy conditionality, as distinct rom duciary accountability, can reduces government accountability to their citizens andtheir parliaments.iii]Citizens and parliamentarians are o ten in the dark about conditions being negotiated behind closed

iii]Policy conditions tell governments what to

spend their money on, or how to manage their

economic a airs. These are decisions over whi

there are legitimate political debates to be had,

these should take place through national or loc

democratic processes, not between donors and

governments. In contrast, duciary account-

ability measures seek to ensure that aid unds

not misdirected, and that appropriate oversight

mechanisms are in place at the country level to

support accountability or how unds are used


22/60

doors, political debates over policies are not public and the government can easily take re uge behind i it aces criticism. This undermines the potential or more responsible recipient government leadedemocratic ownership.

Donors should phase out policy conditions that they attach to their aid and move towards agreeing withand civil society a ew shared and mutually-agreed objectives or donor aid. Phasing out policy condmean unaccountable aid. The developing country government must transparently account or how bothpublic monies are spent, and transparency and accountability obligations o recipient governments shouout in aid contracts. Citizens in both aid-providing and aid recipient countries have a right to expect thimplement certain norms, such as the publication o budgets, monitoring and reporting o governmeindependent audits.35

Donors should assist recipient governments to implement their responsibilities under the UN Conv

Corruption and to progressively realise their obligations under other international treaties they have signshould set out clearly the steps that donors will take i there is a breach o agreed underlying principleshuman rights and integrity, accountability and proper management o public a airs and public property

Box 5 -Vicious cycles:IMF conditions and budget support in Sierra Leone and Malawi

Donors link their aid disbursements to IMF conditions in Sierra Leone. It is a vicious circle. The IMworried about macro-economic stability and Sierra Leone must set limits on public spending. This is

reasonable advice but the IMF set scal de cit and infation targets that many observers believe are Bilateral and multilateral donors re use to disburse unding to Sierra Leone unless the government gereview rom the IMF. When donors hold back their pledged aid the scal de cit grows taking Sierrao track with the IMF.

In 2007, when the IMF sounded alarms about their targets not being met, the EC, World Bank and DFbudget support payments. The Sierra Leonean government put itsel on a cash budget and undingreduction was reduced sharply. The budget support donors recognise the contradictions in their approAide Memoire between the Government o Sierra Leone and the our budget support partners says budget support partners remain concerned that expenditures may need to be compressed beyond the lev

or adequate delivery o services and maintenance o security in a ragile period prior to the electionit may be prudent to revisit, together with the IMF, the easibility o agreed IMF targets.36

Lessons should have been learned rom a similar situation in Malawi in 2001. Malawi went o trackin 2001 due to the governments lack o scal indiscipline. This led to a suspension o a signi cant psupport, which in turn set up a vicious cycle o greater recourse to domestic borrowing, rising intewidening scal de cits. These trends were exacerbated in 2002 by a ood crisis that required the immaize and ertilisers that added some 4.5% o GDP to government spending and halved external resend o 2003/4 interest payments on domestic debt took up one quarter o the government budget.37

22


23/60


23

Donors still need to do more to release control o the policy process. While they can claim a place at the decision-makingtable, they should not choose the menu. Recipient governments at the same time need to increase their capacity tochallenge donor prioritisations and conditions. A demonstrated commitment to poverty reduction and clear publishedplans would strengthen that challenge.


24/60

3. Citizen participationin policy decisions

Achieving more stable unctioning democracies in developing countries requires a stronger social cocitizens and the state. Yet the greater the ocus on accountability upwards to the donor the more this so

threatened.

Current approaches to promoting ownership contradict donors commitment to democracy. Donors concerned about the government (primarily the executive) implementing particular policies. All o our shighlighted the lack o parliamentary engagement in aid decisions. Although some contributors expreabout the ability o weak, rubber-stamp parliaments to engage e ectively in debating and approvingparliaments undermines the democratic process and the possibility o improved parliamentary oversigh

A vibrant civil society representing di erent interest groups is also vital or a healthy democracy. Donoopen space or democratic engagement to fourish. CSOs believe that donors can, through care ul and limsupport and encourage the range o voices which are essential to healthy democracies.

This section examines the policy spaces that have been created in recent years, the degree o citizen partand donor support to CSOs to engage in policy debates.

Policy dialogue: high costs, what gain?

There is a multiplication o actors and insufcient clarity about their roles in aid coordination processes.

Government o Niger, Aid efectiveness study38

A complex array o structures have grown up around the PRSP process where donors and governmencome together to discuss policies and programmes or all sectors. As donors increase the amount o aithrough direct budget support, or to sector (e.g. agriculture, health, education) ministries, they also wanon government policy in that sector. There is a risk that the demands o donors or constant and detailgovernment reduce government time to engage with parliament and civil society.

Consultative groups are the main top-level meetings where donors and the government discuss aid comm

ora have improved or example they now tend to take place in developing country capitals as opposedor Washington. However several interviewees still questioned the nature o the discussions. One Sierraspoke or many when he said the government goes there to listen to what they (the donors) have to supdate on the PRSP and then we receive comments. It is a question o this is what we have done, what d39 And in Honduras the consultative group is still chaired by the Inter-American Development Bank.

Up until 2006 Cambodia held semi-annual Consultative Groups these were chaired by the World Bankco-chaired by the government and the World Bank a ter that. However, in 2007, the consultative group wa Government-chaired Cambodia Development Cooperation Forum (CDCF), which rom now on will tyears.40

At rst glance the number and complexity o the policy discussions is very striking. The ollowing tablto summarise some o them:

24


25/60


25

Table 1 - Aid-related policy dialogue structures

Country Regular meeting spaces (number) Frequency/chairCambodia Government Donor Coordination Committee (1) Four-monthly/ Chaired by government with

donor co- acilitatorsTechnical working groups (19)

Honduras Consultative group Chaired by the Interamerican DevelopmentBank (2004, 2005 and nothing since then)

G-16 - Donors Regular meetingsi) ambassadors and head o mission Rotating chair every six monthsii) Technical monitoring groupiii) Sector working groupAdvisory Committee PRSP (CCERP) Meets 4 to 6 times per year6 line ministries12 CSO representatives

2 donors as observersMali Commission Mixte Mali/ Co-chaired by the Ministry o Finance and heado donors group

Donor group Rotating chair, monthly meetingsSector Groups (18)

Mozambique Processes with all donors:Development Partners Group Monthly. Chaired by World Bank / UNDP

Processes with budget support donors: Every six monthsJoint Review (March April) and Mid-yearReview (August September)Joint Steering Committee Co-chaired by government/donors, monthly

meetingsPAF coordination Group Monthly meetings. Chaired by donorsEconomist working group FortnightlySector working groups (also open to Regular meetings (varies by group)non-GBS donors) (22) Most chaired by government

Nicaragua Global committee Rotating donor chair: currently chairedby Canada

Five sector committees o which some have Each sector committee de nes its operationalup to our sub-committee structure. Meetings are usually chaired

by government bodiesOne Territorial committee Twice a yearBudget Support Group Twice a year

Niger Joint Government-Financial and Technical Chaired by the Finance MinistryPartners National Committee o the PRSPNo meeting since 2003, even though a new decreerom implementation institutional rameworkgovernment reactivated it in 2005

Joint Government-donor sectoral Committees Co-chaired by high level civil servants romin Education, Health, Rural Development sectoral ministries and head o donor

sectoral groupsAmong donors : Not meeting regularlyOECD/DAC donor group, gathering all donors

rom OECD countriesSectoral coordination rameworks Chaired by donor sectoral che s de le

Meet regularlySierra LeoneConsultative group Annual/ co-chaired by government, WB and UN

DEPAC (1) Three-monthly/chaired by governmentPillar working groups (3) At least monthlySub-pillar working groups (6-8)


26/60

Donors constant presence and discussions with governments in an increasing number o sectors puts demstretched administrations. In some places these working groups discuss and direct particular policies. In oon the myriad o PRSP benchmarks (record 214 in Honduras) with policy discussions taking place at a mbetween donor o cials and high-level bureaucrats or even Ministers. These groups also enable donors toinvolved in the details o policy making. Even in cases where donors and recipients agree on the threnormous discussion is taking place about the timing, sequence and prioritisations o particular policies

The number o di erent ora should be signi cantly reduced and donors need to streamline their partiThere are examples o donors withdrawing rom some working group discussions as a way to partially put on government administrations. In Ghana or example, the British government provides resources toby channelling unds through the Dutch and there ore does not need a health sector advisor in its count41And inMali, Norway channels its budget support through Sweden.42Such arrangements, however, are still the exception ratherthan the norm.

Policy dialogue: limited scope or participation

PRSPs created some more space or citizens to participate in discussions about their countries policies countries show a variety o policy dialogue ora in place. Civil society participation in policy discussicase study countries, but overall it is still weak. And parliamentarians continue to be marginalised. Ourtwo related problems insu cient space at the table and concerns about the quality o the dialogue.

Parliaments are consistently ignored or squeezed out rom decision-making. In Niger the rst PRSP

the parliament or observations only a ter it had been approved by the World Bank and the IMF. Theno better, being presented to the National Assembly or in ormation a ter approval. There are very legislatures have the right to approve development loans taken on by a government and even ewer whhave any say over what aid comes into their country. Nicaragua is the only one o our case studies wherrequires all grants and loans should be registered in the general budget.43 Where aid commitments are on-budget, aidrevenue can be discussed in the context o approving the budget.

There are examples o civil society participation in aid related policy dialogues. In Cambodia some CSTechnical Working Groups which seem to be most e ective in the health and education sectors. And in Gbeen actively involved in the dialogues and deliberations o the Consultative Group meetings, where pronly been invited as observers. In Mozambique, CSOs such as G20, the Mozambican Debt Group, the Union, Cruzeiro do Sul, Centre o Public Integrity and the Con ederation o Business Associations infuence on government and donor policies.44

26


27/60


In Sierra Leone, the process surrounding the initial elaboration o the PRSP in 2005 opened up some opportunities orcitizen engagement in discussions about addressing poverty. It was accompanied by a relatively extensive consultationprocess, opening up discussions about investment priorities to many citizens organisations. However, since this timecivil society participation in government-donor discussions has been very limited. No civil society representatives have

participated in any o the 32 meetings that have been held since 2006 by the nominally multi-stakeholder pillar workinggroups linked to the PRSP. The one institution seen by some donors as a representative o CSOs that does participateis ENCISS (Enhancing the interaction and inter ace between civil society and the state to improve poor peoples lives). ENCISS, by its own de nition, is not a CSO and there ore cannot represent the interests o other CSOs in o cial dialogues.Although ENCISS looks like an autonomous organisation, it is a DFID- unded project which has been managed by CAREsince its inception in 2005. According to its director it lies between the state and CSOs. It acts as a broker between CSOsand government and provides small grants to CSOs. The act that donors interviewed view the presence o this donor-created project as participation o civil society shows a lack o understanding o the role and nature o civil society.47

Quality o participation still an issueThe quality o the participatory spaces on o er or CSOs was also raised. Some interviewees indicated that participationwas merely a box-ticking exercise and some civil society organisations doubted the value o participation arguing that thestructures o the groups did not encourage debate, and sometimes actively discouraged it. A Malian NGO representativesaid: theres participation and participation: i you are invited, and in ormed, and asked to sign an attendance list thatis not real participation. Participation means making a contribution, so that the nal product is a shared product.48 Similarly one Sierra Leone CSO representative argued against trying to orchestrate ownership through consultationssaying you cannot say we are doing these consultations in order or it to be owned.49

27

Box 6 -Multi-stakeholder dialogue initiatives:UNDP backed poverty observatories in Honduras and Mozambique

The UNDP has set up poverty observatories in di erent districts o Honduras to consult with the population aboutwhat they think have been the results o donors projects in their area. UNDP also supported a poverty observatorythat the Government o Mozambique set up in 2003 to monitor and evaluate the implementation o the PRSP. Itbrings together the government, donors and CSOs. The twenty CSOs involved rom the outset grouped themselvesin a network called the G20; this group has subsequently grown substantially. Through this observatory, the G20 hasbeen involved in government working groups, in donor mid-year and joint reviews and carried out an independentevaluation o poverty reduction policies.

However a recent evaluation concluded that while it is a legitimate rst step and tool or citizen participation in

[PRSP] implementation and monitoring, (it) has not evolved into an e ective participatory mechanism, chiefybecause it has been restricted to a consultative body with no channels or eedback.45 Some CSO and private sectorrepresentatives also argued that this body had no deliberative power and primarily helped ease the conscience o thegovernment o Mozambique and the donors.46


28/60

Honduran CSOs have withdrawn rom the sector roundtables given the lack o concrete results. In Msociety interviewees said there was not enough opportunity to input into the agenda and not enough timethe meetings as they were always noti ed very late. Demands by CSOs or their concerns to be heard hon dea ears in Niger. The government produced a studyAid e ectiveness in Niger; balance and perspectivesbut it did notconsider the views o a single civil society representative. CSOs requests to participate in the donor-gov

nalise the action plan or implementing the Paris Declaration have to date received no response.50

Many government representatives are not accustomed to substantive engagement with civil society orinterest in it. And donors are in some cases more interested in ormal rather than substantive engagemsociety a box-ticking exercise. Donors risk taking the place o civil society and citizens in policy deroom or them and preventing them rom developing competencies and experience.

Marginalisation o citizens makes it much easier or new government administrations to sweep aside prev

strategies and agreements and declare them redundant, as is argued in the Nicaragua case study. Many Nhave become rustrated with the lack o willingness o the Sandinista government to build on what apositive advances in terms o donor coordination and alignment o aid in the country. The current admundermining civil society participation. The Nicaraguan case says that the government is excluding crcivil society and that the current government does not only exclude civil society that are not in line wignorant o the existing system or citizen participation.51

A common perspective rom CSOs interviewed in the case studies was that the complex array o posurrounding the PRSP did not necessarily mean more or better public debate about policy-making. In

risk that the PRSP-related discussions happen in a parallel and disconnected manner. This ocus on tdiscussions between the executive branch o government and donors risks diverting attention rom thwhere parliaments, citizens and the media can more easily engage. Donors must step back rom trypolicies to create space or genuinely democratic ownership. Civil society groups should always havquality o policy dialogue orums needs to be improved so as to enable eedback into political process

28


29/60


Supporting citizens groups to enhance accountability

We should be able to count on the support o aid, particularly or the strengthening o organisations, sothat civil society can be an organised, competent and transparent orce.

Jamilett Bonilla, Nicaraguan Parliamentarian

Many CSOs ear the Paris Declaration will marginalise them urther rom national policy processes. The section aboveillustrates how the aid architecture can displace citizens rom policy discussion. CSOs are also concerned that as donorsalign their aid to government objectives, issues that are not government priorities such as gender equality in somecountries will get urther sidelined.

Another concern is that as more money is channelled through budget support, the unding base or CSOs may bethreatened. This research did not look in depth at amounts o unding or CSOs, but we did not nd any evidence to suggestthat unding volumes or CSOs are decreasing. These ndings are consistent with a recent study o UK aid which concludesthat: overall DFID expenditure on civil society organisations has been rising although as a percentage o expenditure it hasdeclined slighting rom 9.8 to 8.5.52

The research examined the access that southern CSOs have to o cial donor unds and how donors are supporting civilsociety. In general, we ound it is very di cult or southern CSOs to access o cial unds directly.

- In Niger, or instance, unding is mostly available to international CSOs and local CSOs in general have to becomepartners o these organisations in order to have access to unds.

- In Sierra Leone, donors provide very little unding to national organisations. For example, USAID channels most o its money through international organisations such as CARE, Management Systems International and the NationalDemocratic Institute which implement projects directly. Irish Aid channels nearly hal o its unds through internationalNGOs many o which und Sierra Leonean civil society organisations (e.g. Christian Aid, Trocaire), others o whichimplement projects themselves (e.g. Goal, MSF).

- The European Commission attempted to support Sierra Leonean CSOs through a micro-project und. However it wasunable to support a single grant as none o the applicants were able to ul l the ECs procedural requirements.

- The Honduran case argues that the levels o bureaucracy associated with sourcing unding rom bilaterals is so time-consuming that CSOs pre er not to access unds in this way.53

Although in some cases it still seems easier or service-providing CSOs to access unding (e.g. in Niger) there are someinnovative examples o donors experimenting with ways o supporting advocacy ocused CSOs.

- The Ghana Research and Advocacy Programme gives 3-year core unding to Ghanaian research and advocacyorganisations aiming to cement their autonomy, strengthen their institutional capacity and create more politicalspace or them to engage in the policy process. It is nanced by the Netherlands, the UK, Canada and Denmark. Thisinitiatives bene ts include more reliable and timely delivery o nance and less demanding and more harmonisedreporting requirements.54

- In Honduras and Nicaragua, Ireland provides direct support to CSOs or social auditing. Ireland has also committed toprovide multi-annual unding or a CSO basket und or engaging with PRSP process in Honduras.

29


30/60

Box 7 -Innovative donor/INGO und or local CSOs in Honduras

The UK and Canada have created a multi-donor und to strengthen the participation o Honduran civthe implementation o the PRSP. This und is now nanced by 5 bilateral donors (DFID, CIDA, DANthe EC) and eight international NGOs (Ibis, HIVOS, MS Denmark, Forum Syd, Plan International, Oxand DED the German Development Service). It is a relatively new departure or o cial donors to diHonduran civil society groups. The und is co-managed by international and national NGOs and has m

US$4 million to support 132 projects or local civil society organisations. Programme o cials rom Dand DANIDA have also acted as spokespeople or the und with the main donor grouping and with tgovernment.

30

- In Sierra Leone, DFID channels almost all o its in-country civil society related unding through ENCa broker between the state and CSOs the idea is that ENCISS will also provide smaller grants to locThis innovative programme has experienced some challenges including cumbersome application prhave meant that very little small grant unding has been provided to date. The European Commissiagreed to join orces with DFID and is also putting most o its unding or support o civil societyLeone.

There is little evidence that recent changes in aid modalities are having a negative impact on CSO undthat most donors need to improve the ways they support CSOs. Donors attempting to support CSOs neprocedures and avoid trans erring excessive administration costs onto civil society organisations. As tbudget support to governments, they should at the same time provide more money as institutional supstrengthen civil society groups rather than projectising their unding. Donors also need to build on poso supporting southern CSOs, and in particular those organisations ocused on advocacy and institutio

should avoid using money to direct or control the activities o CSOs.


31/60


31

Summary

Donors still largely set the agenda on aid and nd waysto und their own priorities. Continued use o condi-tions undermines e orts to trans er power to recipientgovernments. Per ormance assessment rameworks at-tached to joint budget support have resulted in a meltingpot o di erent donor priorities and objectives.

Some recipient governments e.g. Cambodia - havetaken a stronger leadership role in aid negotiations.

Many recipient governments however either lack thecapacity or the political will to do so.

There has been an increase in dialogue between donorsand recipient governments, but citizens and parliamentsare largely marginalised rom the debate. Some donorshave been supporting civil society organisations to playa more active role in policy processes.

Some donor examples

8 In Mali, the World Bank includes conditions on pri-vatisation o public sector (telephone, electricity,cotton, railway) which in turn infuence the otherdonors.

8 The UK and the World Bank tie their budget supportto IMF conditions in Sierra Leone.

8 Frances strategy or Mali was conceived in Paris, not

shared with the Malian government and signed be-ore Malian or French NGOs could react.

8 The European Commissions aid to Honduras is highlyconditioned.

4 Ireland is providing direct support to CSOs or socialauditing in Honduras and Nicaragua.

Democratic ownership or displacing democraty?


32/60

4. Falling in line:Do donors back national priorities?

This section examines to what extent aid modalities are shi ting to create more e ective alignmenhappened because o the Paris Declaration? And do the changes amount to a trans er o responsibilityaid spending?

The idea o ownership is to grant more control over aid fows and development policy to recipient countraid money is channelled through country systems, rather than through parallel governance structures, devgovernments will have more power to determine how those resources are spent and how they t with oth

In the Paris Declaration both donors and recipient countries made a number o commitments in thicommitted to support government priorities by matching their aid programmes to what the government hand to spend their aid through government budgetary and procurement systems rather than through d

parallel structures. Recipient country governments, meanwhile, committed to introduce enabling, transpastrategies and rameworks or development aid as a basis or donor collaboration.

The Paris Declaration does not speci y which speci c aid modality donors should use to achieve these gdoes avour programme based approaches over projects. Programme-based approaches include budgegeneral budget support (money paid directly to government co ers) and sector budget support (moneymarked or a particular sector) as well as donor basket unds (donors pooling their unds or speci c pbudget support is widely seen as the most e ective way to align to government strategies and systems.

Using country systems: donors still reluctantUsing existing institutions and systems rather than setting up a myriad o duplicating ones would seem o trust in the capacity and accountability o many developing country institutions has caused donors tinstitutions, and use their own procedures or procurement, monitoring

turning the tables: aid and accountability under the paris framework a civil society report

Documents