1. Commonwealth Local Government Forum Freeport, Bahamas, May 13, 2009 Tim Kehoe Local Government and Aid Effectiveness

2. 2 Objectives  Set out the policy context for this discussion  Recent developments – assessing progress and enriching the aid effectiveness debate  Outline some of the challenges of Aid Effectiveness for Local Governments  Discuss the role of local government in promoting and ensuring aid effectiveness  Recommendations

3. 3 Policy Context– Emerging Consensus on Aid Effectiveness  Paris Declaration (2005): Consensus among 100 donors and countries on measures to enhance the delivery and management of development assistance; a road map with performance indicators  Based on five principles: Ownership: Country leadership in setting priorities, coordinating development of plans Alignment: Ensuring donors align with national plans, use local systems and institutions Harmonization: Strengthen donor coordination and standardization of administrative procedures Managing for Results: Development of performance assessment frameworks Mutual Accountability: Share the burden of accountability and transparency

4. 4 Source: OECD 2006

5. 5 What does this all mean?  AE is dominating the development discourse: it shapes the way donors define priority sectors, focus countries, and mechanisms for aid delivery  Restructuring the way resources are allocated: adoption of new funding modalities: Program Based Approaches (PBAs), Sector Wide Approaches (SWAp), General Budgetary Support (GBS)  Focus on the how (mechanics of aid delivery) more than the what (development effectiveness of aid)

6. 6 Current Context – mid-term assessment and enriching the AE debate  2008 – mid-point review of the Paris Declaration: Donors, recipient governments and other development practitioners undertook assessment of whether PD has had the desired effect of fostering more effective and accountable development  High Level Forum 3 in Accra (September 2-4, 2008)  Paris has fallen short of its objectives due to (1) over- emphasis on aid mechanics rather than development impact and (2) the absence of key development stakeholders (CS, LG) in the policy discussions  Need to enrich the AE agenda: involve civil society, local authorities, parliamentarians  Local government initiated systematic policy reflection on the relevance, impact, and opportunities of aid effectiveness on local government

7. 7 Recent Developments – Local Government and the Aid Effectiveness  Global Forum on Civil Society and AE (Feb/08)  UN Development Cooperation Forum (NY, July, 2008)  Accra High-Level Forum: Accra Agenda for Action September 2008: i) Recognition of LG as development actor ii) LGs to participate in preparation, implementation, monitoring and evaluation of national development plans iii) Capacity building of LG  CLGF Conference on Access to Development Funding for Local Government (Johannesburg, September 2008)  Public Policy Forum on LG and AE (Barcelona, Jan/09)  UCLG position paper on AE and Local Government

8. 8 Challenges of Aid Effectiveness for Local Government  Recognition: Getting local governments recognized as valued partner in helping to implement the Paris Declaration  Participation in national development planning: Lack of involvement of local governments in setting national development plans and priorities  Funding: More funds being channeled through central governments, less going directly to local authorities  Marginalization: Risk of marginalizing the legitimate role that local governments play in development  Alignment: Ensuring that decentralized cooperation is aligned with existing development planning frameworks

9. 9 Principles of Aid Effectiveness – a local government perspective  Ownership: development strategies require ownership by sub- national levels of government  Alignment: development cooperation and national development strategies must align with decentralization frameworks and strengthen local autonomy  Harmonization: LGs should take the lead in harmonization of development cooperation in communities; better coordination of development cooperation partner interventions  Managing for results: the need for harmonized, results-oriented reporting and monitoring frameworks at local level; common set of result indicators to measure effectiveness of decentralized cooperation  Mutual accountability: northern and southern LGs should co- manage programs, holding each other mutually accountable for results; developing a code of ethics to guide cooperation

10. 10 Recommendations – Local Governments and Associations  Build a strong and unified voice on LG and aid effectiveness through national, regional and global organizations (UCLG, CLGF)  Engage in dialogue and advocacy with donors and central governments: OECD, UN/DCF, World Bank…  Promote participatory processes and make decentralized cooperation more beneficiary demand-driven, aid effective  Ensure municipal international cooperation (MIC) and association capacity building (ACB) is well-coordinated and take into account local partner agendas  Develop a community of practice for sharing knowledge, tools and lessons learned in MIC and ACB  Promote long-term partnerships between LGs and partner countries, international organizations, donors, civil society, parliamentarians, etc.

11. 11 Recommendations – Strengthening the relationship between national and local authorities  Make governance a cross-cutting theme for central governments and donors – i.e. greater consideration in policy & program development.  Establish formal mechanisms to strengthen consultation and coordination between local and national governments and donors for policy formulation and planning, implementation, monitoring and evaluation of national development strategies  Enhance coordination between local and national planning processes  Ensure development funds (i.e. budget support) flow to local governments through existing fiscal transfer mechanisms  Improve the transparency/accountability of aid management: strengthen the capacity of local authorities to monitor the delivery and effectiveness of aid (transparency); reinforce mutual accountability and shared responsibility for development

12. 12 Recommendations – Consolidating the Donor/LG Relationship  Recognition of LG as development actors  Creating space for regular consultations and multi-stakeholder dialogue on national development strategies and policy dialogue with OECD, UN Development Cooperation Forum, World Bank  Donor funding for policy development and programs that promote political, fiscal and administrative decentralization  Mechanisms for direct local government management of programs on LG capacity building, promoting democracy and supporting decentralization  Research on impact of budget support and pooled funding are having on local development actors (i.e. LG, civil society)  Offer a balance of aid delivery mechanisms