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Sector-wide approaches [SWAps] in health: an overview

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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

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