Progress since Rome .1 From Rome to Paris

The organisers of the first HLF decided to keep the momentum initiated in Rome by planning to launch the second HLF two years later, in Paris. A set of commitments had been agreed in Rome and were to be imple-mented. Implementation was to be monitored and the results reported at the Paris meeting. This chapter traces actions to carry out these commit-ments, outlines the preparatory steps for the second HLF in Paris, and reviews the Paris Declaration (PD) and the mechanisms set to monitor future progress.⁶

What and how much progress was made during the two-year period since the conclusion of the Rome Forum? Some actions have already been outlined in the previous chapter. These represented a forward movement by policy-makers, who recognised the priority attached to harmonisation and alignment issues.

a) OECD/DAC Progress Report: An OECD/DAC report captured the progress achieved and the challenges ahead. The following are the report’s key findings:

 On harmonisation: Aid providers “made a start” by using simplified procedures and joint analytical work, and by placing more focus on

6 The Paris HLF was my first direct involvement in the aid effectiveness discussions, which I attended as a member of Egypt’s Delegation, led by the then-Minister of International Cooperation. Under her leadership, Egypt was beginning to take serious interest in aid effectiveness and had taken a few initiatives to review existing policies as a prelude to guiding future actions. A few other countries began taking similar actions.

development results; delegated cooperation; common procurement and financial management procedures; and common arrangements for sector-wide approaches and budget support (OECD/DAC, 2005). The key term here is “made a start”. The report stated that

“not a single aid provider” in the 14 partner countries of the survey reported using country systems across the board; providers were discussing to agree on how to assess and strengthen country systems and harmonise their requirements, and doing so in consultation with partner countries.

 On alignment: The report stated that “there is a promising trend toward increased donor alignment behind country strategies”, with a surge of interest in SWAps. There was increased use of programmatic and budget financing in support of these strategies.

 Partner countries started to develop harmonisation plans to meet Rome commitments. Nine countries had such plans in place by the end of 2004; four countries had draft plans and three were preparing these plans.⁷ A few other partner countries had started actions to harmonise even before the Rome HLF, as in Mozambique, Bangladesh and the Philippines.

 Why was progress slow? The report identified the following reasons: insufficient clarity of partner countries’ policies and priorities; absence of a robust framework linking priorities to budget decisions; lack of agreement on indicators triggering disbursements; inadequate use of delegated cooperation among aid providers (where one provider plays the lead role after consulting with others in a given sector). Particularly challenging were harmo-nisation needs of fragile states.

 The report stressed the importance of sustained top-level attention to deal with them, and referred to the “high upfront cost” for both sides of taking serious steps to improve harmonisation and alignment. Few aid providers had explicit training programmes and

7 Action plans ready by Cambodia, Nepal, Kyrgyz Republic, Nicaragua, Niger, Rwanda, Tanzania, Vietnam and Zambia; draft plans made by Bangladesh, Dominican Republic, Ethiopia and Serbia; plans under preparation by Bolivia, Fiji, Kenya and Mongolia.

procedures, together with incentives, to encourage staff behavioural change and dispose of arrangements that discourage such change.

As a result, only 8 per cent of aid providers’ missions in 2003 were jointly carried out, and only 35 per cent of partner countries reported that providers were streamlining their conditionalities.

 In conclusion, the report urged more focus on “higher-value” goals to avoid what it called the “clutter” of multiple processes on harmonisation, alignment and results. It also highlighted the impor-tance of partner-country ownership and mutual accountability, noting that emphasis on results was fairly recent, with priority attention typically given to inputs and outputs.

b) European Union initiative: An Ad Hoc Working Party on Harmonisation was commissioned in 2004 to report on how to advance coordination, harmonisation and alignment. The report pointed out that, within the EU, these issues were a core business and that implementation of the harmo-nisation agenda started in four pilot countries. It outlined the following recommendations, which were subsequently approved by the Council and forwarded as input to the Paris HLF:

 Establish an EU Action Plan in pilot countries where two or more EU members had a cooperation programme;

 Encourage member states and the European Commission (EC) to decentralise competencies, responsibilities and decision-making to the country delegations;

 Develop a strategy to apply sector and thematic guidelines at the EU level to bilateral and community assistance and use them as a platform for dialogue with partner countries and aid providers;

 Strengthen joint EU actions on concrete aspects of harmonisation and coordination;

 Formulate a multi-annual programming and harmonisation strategy to guide analytical and diagnostic work around each pilot country’s national policy and budget cycle;

 Develop a strategy to adopt complementarity within the EU; and

 Develop a common framework for aid implementation procedures and a monitoring mechanism to review progress.

c) Nordic Plus Group and the Swiss Agency for Development and Cooperation (SDC): The Nordic Plus Group outlined a Harmonisation Action Plan, based on common areas of focus in members’ bilateral plans in eight countries, in which four or more members were active. It comprised measures at the global level and at the HQ level to harmonise policies and guidelines for joint arrangements and country programming, develop common approaches to procurement, and encourage joint programming of evaluations (OECD, 2005). The SDC submitted “fact sheets” (State Secretariat for Economic Affairs SECO, 2005) on its harmonisation commitments, referring to its experiences in countries such as Tanzania, Bolivia, Afghanistan and Mozambique.

d) UK Department for International Development (DFID): DFID under-took a study to assess harmonisation progress. It defined harmonisation as “coordination and merging of processes, institutions and systems among aid agencies”, as distinct from alignment, “which is development assistance coherence with and integration into the government systems and institutions of the receiving country” (Balogun, 2005). These were two sides of the same coin, making it difficult to separate the impact of harmonisation from that of alignment.

Balogun, author of the study, underlined the need for a methodical evaluation framework to assess the benefits accrued, arguing that this required:

 gathering empirical evidence of interactions between harmonisation, alignment and country ownership at the country level, to identify immediate benefits and those beyond the reduction in transaction costs;

 developing feasible methodologies for measuring immediate benefits, to collect data on time savings. These were more difficult to gather as they were a function of changes in staff behaviour and their motivations; and

 instituting a methodology to establish the linkage between immediate benefits and likely improvements in government policy and management on both sides of the aid equation.

The paper was based on three case studies to assess harmonisation benefits in Mozambique, Tanzania and Bangladesh. This showed a

“relatively modest” reduction in transaction costs – a conclusion that

had to be qualified, since harmonisation was not the focus of evalu-ations. There was also no consensus on how to measure its effects; in addition, specific aspects of improved harmonisation required front-end investments in systems, policy and procedural changes, and incentives, and these took time to generate benefits.

These early attempts to harmonise without a consensus on how to do it in a coordinated manner suggested the need of an initiative to “harmonise the harmonisers”. This, of course, would pose its own challenges. As a result, it could be seen that harmonisation and alignment issues were not about to be resolved. Meanwhile, an interesting study was carried out by the ODI on fragile states.

e) ODI study: The study examined the special situation of fragile states in harmonisation and alignment. It stated that these issues “may be even more relevant in difficult than ‘normal’ environments”, as they were a precondition to restore ownership of domestic policy processes. Un-harmonised and unaligned behaviour by aid providers could further

“undermine an already weak institutional setup” (Christiansen, Coyle, &

Lockhart, 2004), as they tended either to avoid fragile states or set up parallel implementations units (PIUs) and priorities. This led to increased fragmentation among aid providers and fragile states due to the multiplicity of players on both sides.

The study distinguished four categories of situations:

– those with strong country leadership (Afghanistan and Timor-Leste)

– those with strong aid providers’ leadership (Sierra Leone, Solomon Islands)

– those with weak local leadership and fragmented aid providers

– those countries with armed conflict and/or severe concerns with legitimacy (Burundi, Haiti, etc.)

It recommended the following actions to improve harmonisation and alignment in such partnerships:

 Undertake diagnostics of the country’s processes and systems.

 Align, where possible, aid providers’ activities to all stages of government strategy, policy and implementation cycle.

 Where alignment was not possible, harmonise between aid providers to allow alignment later on.

 Adopt selectivity and proper sequencing of interventions as a critical means to produce results.

 Support policy-making and aid management in partner governments.

 Monitor progress on alignment and harmonisation.

f) Civil society reactions to the Paris Declaration: In reviewing the second consultative draft of the PD, NGOs from North and South met in early February to discuss it with aid providers’ representatives. They argued that the draft did not tackle fundamental obstacles preventing aid from going where it was needed and did not adequately address issues of ownership, capacity-building, predictability and untying. They recommended that the final draft (a) include a commitment to increase aid going to least-developed countries to improve basic social services;

(b) reduce tied aid; (c) enhance country ownership and strengthen local capacities; (d) provide greater predictability and commit both sides to fight corruption; and (e) set up a framework for mutual accountability. A total of 26 CSOs signed the document issued at the end of the meeting (African Forum and Network for Debt and Development (Afrodad), ActionAid International, Asia Pacific Mission for Migrants, BanglaPraxis, Basc Caritas, BOND, Catholic Institute for International Relations et al., 2005). This led directly to the inclusion of “mutual accountability” as being one of the key principles in the subsequent PD.

Oxfam issued a condemning report, blaming rich countries for lack of action since Rome: “these same countries made a series of commitments to reform the aid system, and transform it into an effective instrument of change. Instead of celebrating progress, they will be confronted by the results of two years of inaction” (ActionAid International & Oxfam International, 2005). The report recommended the following:

a) Make aid accountable by improving aid quality, reviewing progress annually and creating an independent UN commission on aid effectiveness;

b) Make aid effective by untying it and using local country systems; and c) Reform the aid architecture.

Although the above summary does not capture all progress since Rome, it shows that a series of serious actions were being taken to address these issues. The results, however, continued to be well-below expectations.

Was this perhaps because more time was needed to show better results? Or were there deep-rooted causes that required more drastic surgery?

Answers to these questions would have to wait until a fresh assessment was made prior to the next HLF.

3.2 Paris High Level Forum