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Aid instruments that support the scope for domestic accountability

A number of aid practices and instruments can help improve accountability in partner countries:

  • • Ensuring project aid is embedded in government budget frameworks and systems (budget support). The Paris Declaration committed donors to base their overall support on partner countries’ national development strategies and to progressively align their policies and procedures with partner country priorities, systems and procedures. Budget support is arguably the most effective instrument for delivering aid in line with these commitments. Project aid, on the other hand, can undermine budget processes in developing countries where it is not captured in national budgets. In Uganda, for example, a large proportion of aid to the health sector is still provided as off- budget, project-based aid. Given that most donor support will continue to mix budget and project support in the developing world in the near future, efforts must continue to ensure that project finance is captured in local budget frameworks and financial management systems.
  • • Streamlining, rationalising and refocusing donors’ budget performance arrangements. Different donors use different indicators for measuring partner governments’ performance against their various conditions for receiving aid. This creates complex monitoring and co-ordination challenges for partner countries, instead of providing a single, comprehensive set of targets against which governments can be held to account. This was the case in Mali, where differing donor disbursement requirements under budget support frameworks have heightened the donor role in partner country accountability processes. Further, programme-based approaches - which place a premium on government-to-government dialogue and relationships - can undermine broader participation or ownership. For example, in Mozambique donors are seen as dominating policy dialogue with government, to the detriment of civil society (Box 4.3). All these practical implications of budget aid practices reveal donor “clutter” and inefficiencies, and an unhealthy dominance by the donor community of budget accountability systems in partner countries.

Box 4.3. Policy dialogue in Mozambique

Some analysts argue that the donor community’s increasing role in sectoral working groups and budget support joint reviews is usurping the participation of parliamentarians and civil society in domestic accountability. Although civil society groups, for example, are part of the joint review process, they often lack the capacity and resources to have significant influence. In a country with a strong ruling party and a centralised state, fora for dialogue around development co-operation could potentially serve as a platform to allow civil society and parliamentarians to challenge policies and hold government to account. In response, donors have now begun to support civil society in preparing their participation in joint reviews.

• Maximising synergies among aid instruments and leveraging scarce aid resources. The development assistance community could do a much better job of ensuring that the various types of governance support - by individual donors and across the local donor community as a whole - work together to create synergies. All governance-related development co-operation interventions - both for public administrative functions such as financial management and procurement as well as for building more political institutions such as parliaments and political parties - could more systematically take account of, and address, the implications of such support for accountability actors and functions. The links and impacts that all governance-related development co-operation interventions have on accountability need to be leveraged: for example, more work is needed to ensure that ministries and government officials are more accountable to parliament and citizens, and that state institutions are accountable to their hierarchies or internal control functions.

Special aid delivery arrangements that improve donor co-ordination

Certain types of co-ordination frameworks and aid instruments, such as sector support and basket funds, can significantly enhance the impact and reduce the transaction costs of development assistance - including accountability support. Joint funding arrangements, a common and shared political economy analysis of the local context, and close co-ordination of programme planning and implementation, are especially useful features. Channelling development assistance through basket funds and sector budget support can facilitate more co-ordinated and coherent programme objectives, reduce overlap and fragmentation, improve division of labour, and provide more balanced support for the accountability system as a whole - so long as implementation arrangements are clear, roles and responsibilities have been identified and agreed, and communication channels established and used (Box 4.4).

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