From Paris to Accra The Road to More Effective Aid Regional Workshop, Advisory Group on Civil Society and Aid Effectiveness Ha Noi, Viet Nam 11 October 2007 Felix Zimmermann OECD Development Centre

Overview The Paris Declaration: Brief introduction Results from the 2006 Baseline Survey To Accra and beyond: opportunities and risks

Governments agree on: New objectives (MDGs) New instruments (PRSPs) More aid (Monterrey & Gleneagles)

But what about effectiveness? To meet the MDGs, developing countries need: Operational development strategies Stronger public financial management systems Space to choose own priorities Reduced transaction costs

Aid comes at a high cost Mozambique (845) Ethiopia (790) 850 800 750 700 650 600 550 Mozambique (845) Ethiopia (790) Tanzania (700) New donor projects and activities per year Uganda (630) Nicaragua (600) Bolivia (550) Vietnam (540) This slide attempts to answer this question by identifying those countries who have to put up with the highest transaction costs. Before I proceed with the methodology, I would like to ask you for your special attention. Not because it is complicated but because it took me ages to draw the thermometer. So whilst you are -- hopefully -- admiring my drawings skills, let me explain what I have attempted to do here. The chart that I’m about to present lists aid dependent countries who have, in average, the highest number of new development related activities. This is generally considered a reasonable proxy for transaction costs. The Gov. of Vietnam, for example, has to deal with 540 new transactions per year. Let’s now look more closely at the case of Mozambique. The Gov of Mozambique has to deal in average with 845 new development activities per year; in addition to those that are already being managed. A conservative estimate for a typical African country is that this translates into thousands of new reports and more than 1 000 new annual missions to appraise, monitor and evaluate. Each mission asks to meet with key officials, and each will ask the government to comment on its reports.

Features of the 2005 Paris Declaration on Aid Effectiveness Broad participation 56 partner countries; 35 donor countries; 26 multilateral donor agencies [14 civil society organisations] 5 core principles 56 specific commitments 12 measurable indicators for 2010 Targets & monitoring

The Aid Effectiveness Pyramid 4. Development Results Ownership (Partner countries) Partners set the agenda 1 Managing for Results 5 Aligning with partners’ agenda Using partners’ systems Alignment (Donors - Partner) 2 Harmonisation (Donors - Partner) Establishing common arrangements Simplifying procedures Sharing information 3

Timeline: to Accra and beyond 2011 HLF-IV 2008 Accra HLF-III Targets 2005 Paris HLF-II Second survey Baseline Survey Three rounds of monitoring were agreed in the Paris Declaration. 2005 2007 2010

Who’s who on the road to Accra? Working Party on Aid Effectiveness Bilateral and multilateral donors Partner countries Steering Committee for Accra HLF-III Other initiatives include: Advisory Group on Civil Society and Aid Effectiveness OECD Global Forum on Development

Overview The Paris Declaration Results from the 2006 Baseline Survey To Accra and beyond: opportunities and risks

The 2006 Survey on Monitoring 34 countries (self-selected), including: Viet Nam; Mongolia; Cambodia Mostly where Paris Declaration is already discussed Not enough fragile states to draw conclusions Method Country surveys with government coordinators WB indicators (2005 CDF Progress Report; Aid Effectiveness Review; CPIA)

Results on Ownership Target for 2010: Baseline survey results: 75% of countries have operational development strategies Baseline survey results: 17% (5 out of 34 countries) Insufficient use of national budgets to support priorities Insufficient engagement of citizens and parliaments Very slow progress in taking the lead in aid-funded activities (e.g. by co-chairing Consultative Groups)

Ownership in the region Country Baseline Challenge Vietnam Strong Dissemination of Hanoi Core Statement to sectors and provinces Cambodia Moderate Synchronisation among development plans, medium-term expenditure framework and budget process Mongolia Low Linking plans and budget

Results on Alignment #1 Target for 2010: Baseline survey result: Halving the % of aid to governments that remains unreported in budgets Baseline survey result: Half of surveyed countries show budget realism of 70% or less This suggests that: Donors don’t get information to authorities on time Donors are not always realistic about their ability to disburse Authorities are not equipped to capture information

Alignment in the region Country Baseline Challenge Vietnam Moderate Donor institutional limitations on use of budget support and government systems Cambodia Low Limited use of country public financial management and procurement systems Mongolia Little aid is recorded in national budget

Results on Alignment #2 Target for 2010: Baseline survey result: Halve the % of aid not disbursed within scheduled fiscal year: improve aid predictability Baseline survey result: Of $19,933 million, only $14,861 million are recorded in national budgets Budget support is more predictable as part of multi-year plans, but less so when there are performance-based tranches

41% of aid was disbursed on schedule in 2005 Aid predictability in 2005 41% of aid was disbursed on schedule in 2005 $ 1 420 m $ 1 262 m $ 1 061 m $ 998 m $ 930 m $ 696 m AID SCHEDULED AID RECEIVED EGYPT AFGHANISTAN ZAMBIA

Results on Alignment #3 Target for 2010: Baseline survey result: Reduce parallel project implementation units by 2/3 Baseline survey result: 4 countries have more than 100 parallel units Total = 1832 units in 34 countries

Alignment in the region Country Baseline Challenge Vietnam Moderate Donor institutional limitations on use of budget support and government systems Cambodia Low Limited use of country public financial management and procurement systems Mongolia Little aid is recorded in national budget

Results on Harmonisation #1 Target for 2010: Provide 66% of aid flows using programme-based approaches Baseline survey result: 43% (but definitional questions remain)

Results on Harmonisation #2 Target for 2010: Conduct 40% of field missions jointly Baseline survey result: 18% Good practice example: “quiet” periods

Too many missions? 10 453 missions in 34 countries in 2005 800 Vietnam (791) 750 700 650 600 Cambodia (568) 550 Honduras (521) Mongolia (479) 450 Uganda (456) Number of donor missions in 2005

A multilateral muddle Source: National Audit Office (2005), DFID – Engaging with Multilaterals

Overview The Paris Declaration Results from the 2006 Baseline Survey To Accra and beyond: opportunities and risks

The Accra Agenda for Action: an opportunity Accra may lead to: Accelerated progress on the existing indicators Deepened understanding of the 5 principles e.g. democratic ownership & the role of civil society A broadened, more legitimate, monitoring exercise Wider consensus with new public and private actors

Accra and three related risks Are our expectations too high? Can and should Accra solve all of aid’s ills? Can it deal with a complex international aid architecture? Are we overloading the agenda? New indicators? Are we undermining other processes? e.g. UN follow-ups to the MDGs or Monterrey

Thank you for your attention. www. oecd Thank you for your attention! www.oecd.org/development/globalforum www.oecd.org/dac/effectiveness/monitoring felix.zimmermann@oecd.org

Q&A The survey should be used before assessing! We need more basic data. None of governments don’t want to accept. The need of technical supports. 2.The number of surveyed nations is not representative. The scale of survey is not good result but the government should take part in these ones. Other donors have different indicators The result could be accessed again. 3. AG should remember these issues. We use the priority for languages to translate these documents, so it is difficult in reality. 4. Other right to women. 5. The nations that is not representative, is selected 6. The survey in Viet Nam: ownership is strong but PD is the first time to be seen. The development strategy is clear about the steps, processes. The good coordination between Viet Nam with donors. 7. The set of relations should be clear? The representative people? The South-south relationship is already. 8. In Viet Nam have many of donors why is it? there is inequality of donors in Philippine? 9. The nation miss the agreement, which is punish to it? -

Q&A 10. Timor have $ 2 billions=> more for small population (about 1 million). Co-donors 11. OECD didn’t take care the people who will have the result of projects. 12. Viet Nam have a good coordination.