SECTOR POLICY SUPPORT PROGRAMMES A new methodology for delivery of EC development assistance. 1

Part 1 – Background Paris Declaration of March countries and 26 multilateral organisations resolved to take far- reaching and monitorable actions to reform the ways they deliver and manage aid. 90 countries and 26 multilateral organisations resolved to take far- reaching and monitorable actions to reform the ways they deliver and manage aid. Participants agreed to 56 Partnership Commitments and 12 Indicators of Progress. Participants agreed to 56 Partnership Commitments and 12 Indicators of Progress. Pledged to monitor and assess their progress against agreed targets set for Pledged to monitor and assess their progress against agreed targets set for Recognised that commitments must be interpreted in the light of the of each partner country’s situation. Recognised that commitments must be interpreted in the light of the of each partner country’s situation. Welcomed initiatives by partner countries and donors to establish their own targets for improved aid effectiveness. Welcomed initiatives by partner countries and donors to establish their own targets for improved aid effectiveness. Targets require action by both donors and partner countries Targets require action by both donors and partner countries 2

Paris Declaration Developing countries will exercise effective leadership over their development policies & strategies, & will coordinate development actions; Developing countries will exercise effective leadership over their development policies & strategies, & will coordinate development actions; Donor countries will base their overall support on recipient countries' national development strategies, institutions, and procedures; Donor countries will base their overall support on recipient countries' national development strategies, institutions, and procedures; Donor countries will work so that their actions are more harmonized, transparent, and collectively effective; Donor countries will work so that their actions are more harmonized, transparent, and collectively effective; All countries will manage resources and improve decision- making for results; All countries will manage resources and improve decision- making for results; Donor and developing countries pledge that they will be mutually accountable for development results. Donor and developing countries pledge that they will be mutually accountable for development results. 3

Monitoring Progress 12 Indicators of Progress 12 Indicators of Progress Targets set for 2010 Targets set for 2010 Progress scheduled to be monitored in 2006, 2008 and 2010 Progress scheduled to be monitored in 2006, 2008 and

Indicator No 1 - Ownership Partner countries have operational development strategies with clear strategic priorities, linked to a medium-term expenditure framework and reflected in annual budgets. Target for 2010: – –At least 75% of partner countries have operational development strategies. 5

Indicator No 2 Indicator No 2 Reliable Country Systems Number of partner countries that have procurement and public financial management systems that either (a) adhere to broadly accepted good practices or (b) have a reform programme in place to achieve these. Target for 2010: – –(a) Public financial management – Half of partner countries move up at least one measure on the Country Policy and Institutional Assessment scale of performance. – –(b) Procurement – One-third of partner countries move up at least one measure on the four-point scale used to assess performance for this indicator. 6

Indicator No 3 Aid Flows Aligned with National Priorities Percent of aid flows to the government sector that is reported on partners’ national budgets. Target for 2010: – –Halve the proportion of aid flows to the government sector not reported in government budgets (with at least 85% reported on budget). 7

Indicator No 4 Indicator No 4 Strengthen Capacity by Co-ordinated Support Percent of donor capacity-development support provided through coordinated programmes consistent with partners’ national development strategies. Target for 2010: – –50% of technical co-operation flows are implemented through co-ordinated programmes consistent with national development strategies. 8

Indicator No 5a Indicator No 5a Use of Country Public Financial Management Systems Percent of donors and of aid flows that use public financial management systems in partner countries, which either (a) adhere to broadly accepted good practices or (b) have a reform programme in place to achieve these. Target for 2010: – –100% of donors use partner countries’ PFM systems – –Reduce by two thirds the amount of aid to the public sector not using partner countries’ PFM systems. 9

Indicator No 5b Indicator No 5b Use of Country Procurement Systems Percent of donors and of aid flows that use partner country procurement systems which either (a) adhere to broadly accepted good practices or (b) have a reform programme in place to achieve these. Target for 2010: – –All donors use partner countries’ procurement systems. – –Reduce by two thirds the amount of aid to the public sector not using partner countries’ procurement systems. 10

Indicator No 6 Indicator No 6 Strengthen Capacity by Avoiding Parallel Implementation Structures Number of parallel project implementation units (PIUs) per country. Target for 2010: – –Reduce by two-thirds the number of parallel project implementation units (PIUs). 11

Indicator No 7 Indicator No 7 Aid Is More Predictable Percent of aid disbursements released according to agreed schedules in annual or multi-year frameworks. Target for 2010: – –Halve the proportion of aid not disbursed within the fiscal year for which it was scheduled. 12

Indicator No 8 Indicator No 8 Aid Is Untied Percent of bilateral aid that is untied. Target for 2010: – –Continued progress over time. 13

Indicator No 9 Indicator No 9 Use of Common Arrangements or Procedures Percent of aid provided under programme- based approaches. Target for 2010: – –66% of aid flows are provided in the context of programme-based approaches. 14

Indicator No 10 Indicator No 10 Encourage Shared Analysis Percent of (a) field missions and/or (b) country analytical work, including diagnostic reviews, that are jointly prepared. Target for 2010: – –(a) 40% of donor missions to the field are jointly undertaken. – –(b) 66% of country analytical work is jointly undertaken. 15

Indicator No 11 Indicator No 11 Results-Oriented Frameworks Number of countries with transparent and monitorable performance assessment frameworks to assess progress against (a) the national development strategies and (b) sector programmes. Target for 2010: – –Reduce by one-third the proportion of countries without transparent and monitorable performance assessment frameworks. 16

Indicator No 12 Indicator No 12 Mutual Accountability Number of partner countries that undertake mutual assessments of progress in implementing agreed commitments on aid effectiveness including those in the Paris Declaration. Target for 2010: – –All partner countries have procedures for mutual assessment reviews in place. 17

The Purpose of the Paris Declaration 18

To Make Joint Progress Toward Better Aid Effectiveness Ownership - Developing countries set their own strategies for development, improving their institutions and tackling corruption. Ownership - Developing countries set their own strategies for development, improving their institutions and tackling corruption. Alignment - Donor countries align with these objectives and use local systems for delivery of assistance. Alignment - Donor countries align with these objectives and use local systems for delivery of assistance. Harmonisation - Donor countries coordinate, simplify procedures, and share information to avoid duplication. Harmonisation - Donor countries coordinate, simplify procedures, and share information to avoid duplication. Results - Developing countries and donors shift focus to development results - and results get measured. Results - Developing countries and donors shift focus to development results - and results get measured. Mutual Accountability - Donors and partners are accountable for development results. Mutual Accountability - Donors and partners are accountable for development results. 19

Implications for Partner Countries Partner Countries must now take the lead in establishing coherent, well planned, well budgeted development policies and strategies. Partner Countries must now take the lead in establishing coherent, well planned, well budgeted development policies and strategies. They must improve their systems and procedures to ensure efficient, transparent and cost-effective allocation of resources. They must improve their systems and procedures to ensure efficient, transparent and cost-effective allocation of resources. They must coordinate donor support for development strategies and policies. They must coordinate donor support for development strategies and policies. 20

Implications for Donors Leadership in the development process lies with the partner country. Leadership in the development process lies with the partner country. Donors must align their support to partner country strategies and policies. Donors must align their support to partner country strategies and policies. They must use partner country systems to deliver aid. They must use partner country systems to deliver aid. They must harmonise their procedures, including by carrying out investigations and analyses jointly with partner countries and other donors. They must harmonise their procedures, including by carrying out investigations and analyses jointly with partner countries and other donors. Aid must be untied. Aid must be untied. 21

Joint Implications for Partner Countries and Donors Both are mutually responsible for the results. Both are mutually responsible for the results. Both are responsible for monitoring progress Both are responsible for monitoring progress 22

Progress to 2008 Progress is being made across all indicators. Progress is being made across all indicators. Shows that real change is possible when there are joint efforts between partner countries and donors. Shows that real change is possible when there are joint efforts between partner countries and donors. BUT A considerable acceleration of change in most countries will be needed to achieve the targets set for A considerable acceleration of change in most countries will be needed to achieve the targets set for

Progress on Track Indicator 4 – Technical co-operation is aligned and co-ordinated. Indicator 4 – Technical co-operation is aligned and co-ordinated. Indicator 2a – Public financial management (PFM) systems are reliable. Indicator 2a – Public financial management (PFM) systems are reliable. Indicator 8 – Aid is increasingly untied. Indicator 8 – Aid is increasingly untied. 24

Targets Requiring Efforts But Still Within Reach Indicator 6 – Donors avoid parallel project implementation units (PIUs). Indicator 6 – Donors avoid parallel project implementation units (PIUs). Indicator 3 – Aid flows are accurately recorded in countries’ budgets. Indicator 3 – Aid flows are accurately recorded in countries’ budgets. Indicator 7 – Aid is more predictable within the year it is scheduled. Indicator 7 – Aid is more predictable within the year it is scheduled. 25

Targets Requiring Very Special Efforts Indicator 1 – Countries operationalise their development strategies. Indicator 1 – Countries operationalise their development strategies. Indicators 5a and 5b – Donors use country PFM and public procurement systems. Indicators 5a and 5b – Donors use country PFM and public procurement systems. Indicator 9 – Donors use co-ordinated mechanisms for aid delivery. Indicator 9 – Donors use co-ordinated mechanisms for aid delivery. Indicators 10a and 10b – Donors co-ordinate their missions and their country studies. Indicators 10a and 10b – Donors co-ordinate their missions and their country studies. Indicator 11 – Countries develop sound frameworks for monitoring development results. Indicator 11 – Countries develop sound frameworks for monitoring development results. Indicator 12 – Mechanisms for mutual accountability are established at country level. Indicator 12 – Mechanisms for mutual accountability are established at country level. 26

Accra Agenda for Action 2008 An Agenda to Accelerate Progress Predictability – donors will provide 3-5 year forward information on their planned aid to partner countries. Predictability – donors will provide 3-5 year forward information on their planned aid to partner countries. Country systems – partner country systems will be used to deliver aid as the first option, rather than donor systems. Country systems – partner country systems will be used to deliver aid as the first option, rather than donor systems. Conditionality – donors will switch from reliance on their own conditions about how and when aid money is spent, to conditions based on the developing country’s own development objectives. Conditionality – donors will switch from reliance on their own conditions about how and when aid money is spent, to conditions based on the developing country’s own development objectives. Untying – donors will relax restrictions that prevent developing countries from buying the goods and services they need from whomever and wherever they can get the best quality at the lowest price. Untying – donors will relax restrictions that prevent developing countries from buying the goods and services they need from whomever and wherever they can get the best quality at the lowest price. 27