1. Sector-wide approaches [SWAps] in health: an overview
Sector-wide approaches [SWAps] in health: an overview
Tom Merrick, World Bank Institute

2. Objective & issues to address:
Objective: provide an overview of SWAps
Issues to address:
Emergence & popularity of SWAps
What SWAps are, their core elements
Readiness criteria for SWAps
SWAp financing options
Advantages & disadvantages of SWAps

3. Why emergence, popularity of SWAps
Three key sets of underlying reasons:
shift in macro-economic dialogue from SAPs to public expenditure management
recognized need to ‘reform aid’
opportunities provided by sector reform programs

4. Why reform aid? Problems with ‘project modality’ :
Distortion of sectoral policies & budgets
Minimal national ownership
Undermining existing national systems
Burden on recipient governments
High operating/transaction costs
Inflexibility; one size fits all
Varying standards of service provision

5. Objectives SWAp is expected to achieve
Address fundamental issues/problems of ‘project aid’ modality
Increase aid effectiveness
Restore ideal DCG/donor relationships
Establish greater coherence between policies, programmes and budgets
Demonstrate ‘programme approach’
Scale-up positive lessons learned

6. What then is SWAp?
Various definitions; new concept; understanding still evolving
aid coordination mechanism; aid modality
way of managing development assistance
partnership between govt. & donors
approach to sectoral development
integrated national programme for policy reform in a sector, SDP (UNICEF)

7. Common definition A method of working b/w govt & DPs
All significant funding for the sector supports a single policy and expenditure program
Govt. provides leadership
Common management approaches applied across the sector by all partners
Programme progresses towards relying on govt. procedures to disburse and account for all funds

8. Core elements/attributes of SWAps
sector-wide in scope
agreed coherent policy framework & strategy
national government leadership
all/most donors sign on
common/joint work program
common management arrangements:
disbursement and accounting of funds
reviewing performance
move towards reliance on govt. procedures

9. Variations in sector aid arrangements
Sector reform program
Project type aid
Earmarked funds
Pooled funds
Stand alone
projects
Budget support

10. Contrast Project and Sector Programme Approaches
Self-contained
One implementing agency, one or a few financiers
Projects have own support systems
Implementation by a project unit overseen by a management committee
Project has clear beginning and end
Sector Program
Open-ended and complex (covers many projects and activities)
Many implementing agencies, many financiers
Common support systems
Project unit/management committee model cannot cope with complexity of program
Program is a rolling process with continuous planning, implementation

11. What is the “health sector”?
How the “health sector” relates to the “health system”
Does the sector refer to public sector only, or public and private actors?
Health outcomes are influenced by forces inside and outside the health system — how does SWAp address factors beyond health care?

12. How wide is sector-wide?
Ideally, a SWAp should capture the full spectrum of activity, financing and participation in the health sector
In practice, most SWAps only capture public expenditures (approx. 50% of total sector expenditure)
However, as SWAps mature, planning and budgeting functions capture more fragments of existing programmes, and new investment

13. Risks/common concerns in SWAps
Reduced/static govt. spending on health
Weak government capacity to implement/manage programme
Inadequate ownership/participation of wider stakeholder group
Disruption of services [transition]
Suitability in decentralized systems

14. Risks/common concerns (2)
Loss of focus/fungibility
Weak accountability environment
Loss of attribution
Increased demands on government performance
Treatment of some issues [RH,gender]
No window on the poor
Capacity of govt to deal with NGOs, PS

15. Risk: support systems during transition
Projects often have own procurement, training, info. & communication systems
Sector-wide management often brings common arrangements
Well-functioning programs risk being undermined by poorer ones
Timing of shift to common support systems critical
Part of donor reluctance to abandon projects

16. Advantages of SWAps (1)
Increases predictability of funding; [govt./DPs]
Places government squarely in charge, guided by policy and planned with knowledge of available resources
Identifies priorities; improves financing base
Reduces transaction costs (arguably)
Applies interventions equitably, avoiding geographic disparities

17. Advantages (2) Increases transparency of resource
Improves accountability
Increased value for money
Easier to disburse funds
More effective partnerships
Employs performance monitoring and uses an evidence-based approach
DPs: greater influence over policies, priorities, expenditure

18. When is SWAp most likely to succeed?
Where:
public expenditure in sector is high
donor contribution is large
donor co-ordination could be a problem
donors willing to harmonize procedures
agreement on strategy b/w Govt. & DPs
supportive macro budget environment
good fin/accountability mechanisms
institutional relationships manageable
relatively adequate national capacities

19. SWAp financing options
Pooled or basket funding [budget support]
thru/managed by govt. [preferred]
managed by a partner
Pooled with earmarking
Parallel funding [for activities in program]:
traditional projects
direct provision of goods & services
Mixed [some donors do both]
Example: Ethiopia: 3/4 channels

20. ‘Pools’ vary: scope, operation, coverage
Zambia: district basket restricted to non-staff, non-drug costs
Tanzania: district pool prescribed by spending categories; ceiling set at 50 US cents per capita
Mozambique: operates a drugs procurement and distribution pool for all levels of service delivery in the country
Time sliced financing” in Bangladesh: WB reimburses part of govt sector expenditure

21. Advantages of Pooling Focuses on strengthening govt. systems
Transfers control to govt.
Lowers transaction costs; eliminates duplication of financing
Collective risk; govt. & DPs
Improves predictability of long term financing
Promotes transparency, flexibility
Improves coordination for greater impact on agreed priorities
Easier to disburse funds

22. Problems with Pooling
Requires strong government systems for management and accountability
Requires harmonization of donor procedures
Donors lose attribution to specific activities and outcomes
Fungibility/diversion of funds

23. SWAps and health sector reforms
SWAps not synonymous with HSR
SWAps one of several reform initiatives, including the following:
Decentralizing budgeting/management of SD
Separating financing from provision of services
Introduction of new financing/payment schemes
Devolving ownership of tertiary-care facilities
Shifting donor funds from projects to SWAps
Reorganizing MOH; redefining roles of units

24. SWAps & other development initiatives
Poverty Reduction Strategies (PRSP)
Local government reform/ decentralisation
National Development Strategies and Perspectives (e.g. CDF; Vision 2025;…)
National ublic service reform programs
Public Expenditure Reforms(e.g. MTEF)
Macroeconomic growth or decline and debt servicing (e.g. HIPC II)

25. New funding modes: sector-wide approaches (SWAps)
Program vs. project funding
Agreed sector policy framework, often as part of broader reform process
Government capacity to manage integrated sector program is critical
Donor roles and coordination: pooled (or “basket”) vs. parallel funding
Roles of specialized agencies

26. Risks and benefits of SWAps
Reduced fragmentation of government effort, more coherent focus on priorities
Government “in the driver’s seat”
Is government able to manage sector programs effectively? -- transition issues
Risks to priority programs that had project support (e.g. problems with procurement and technical assistance)
Special challenges faced by UN agencies and NGOs

27. Country examples (experience to date is fragmentary, mixed):
Bangladesh: restructuring underway, capacity problems (procurement)
Ghana: already reforming, SWAp in tandem with other reforms
Ethiopia: innovative funding model, program disrupted by war
Zambia: one of the first, not enough involvement of key stakeholders