Donor Coordination: COVID and Beyond

Donor Coordination: COVID and Beyond

COVID magnifies the need for effective coordination of donors by Government. Since the Paris Declaration of 2005 right up to recent evidence from the UNDP-OECD’s Global Partnership for Effective Development Co-operation (GPEDC) most recent report, progress has been patchy. This is also borne out by our own experience of managing and implementing projects in the international development community. 

Hubconsult believes that the need for effective donor coordination is more critical than ever at a time when short and longer term financing sources are being continually negotiated from multiple sources, and Government strategies and action plans will need to be ever more complex in order to keep up with the pace of developments. 

We provide a diagnostic tool for Government and donors on their donor coordination mechanisms and support the implementation of more donor coordination based on agreed recommendations. The perspectives from Governments, donors, international organisations and CSOs and citizens is encouraged. 

How to improve donor coordination at this critical time?

Our own experience among international development on the budget cycle, M&E and working in different countries, sectors and funded by different donors corroborates the concerns expressed in monitoring the Paris Declaration (2005) and from Global Partnership for Effective Development Co-operation (GPEDC) Global Report of 2019.

 

In our view, aid is often insufficiently demand-driven. This is sometimes manifested by projects which seem more "in parallel" to Government rather than responding to Government demand. When this happens, aid effectiveness and value for money to ultimate beneficiaries are at risk. 

 

It is likely that even the best-endowed donors and organisations will have their budgets stretched from 2020 onwards. 

 

The supply of donor funding will be under threat from macroeconomic challenges and debt overhang in donor countries due to COVID, to which we must add the political threat to UN funding from the US Government, and the impact of Brexit on the EU. At the same time, the demand for assistance is magnified by COVID around the world, such that prioritisation of projects is critical. Every US$ and € must deliver value to citizens in need as much as it can. 

 

The best way to do this is to strengthen donor coordination by Government itself. 

 

The first couple of section puts this in some context. Then the form asks you to provide some information. 

 

COVID now means that Governments need to take the lead more effectively

Donors (multilateral, bilateral as well as private sector partners and international organisations and IFIs) are queuing up to provide support at sub-national, national, regional and global levels, as well as across a range of SDGs, sectors and sub-sectors. How to coordinate "aid", and how to coordinate it with the extra layer of COVID?

The COVID crisis will highlight the need for strong and effective donor coordination led by Government more so than at any other time. 

Progress on donor coordination has already been very "mixed" in the last decade since the Paris Declaration. 

The need for donor coordination was most conspicuously highlighted by the Paris Declaration (2005), which rightly urged that "development" itself needs to be locally driven, nationally led and coordinated along 5 Principles.

Ownership: Developing countries set their own strategies for poverty reduction, improve their institutions and tackle corruption.

Alignment: Donor countries align behind these objectives and use local systems.

 

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.

 

Mutual accountability: Donors and partners are accountable for development results.

However, progress towards those goals has been patchy:

As the OECD found several years later in Aid Effectiveness 2011: Progress in Implementing the Paris Declaration, 

"the findings are clear: while many donors and partner country governments have made significant progress towards the targets that they set themselves for 2010, few of them have been met. Partner country authorities appear to have gone further in implementing their commitments under the Paris Declaration than donors..."

Global Partnership for Effective Development Co-operation (GPEDC) highlights again slow progress in donor coordination

Again in 2019, the Global Partnership for Effective Development Co-operation (GPEDC), led by the UNDP and OECD issued its Global Progress Report and found very mixed results…

" development partners’ alignment to partner country priorities and country-owned results frameworks is declining."

"Forward visibility of development co-operation at country level is weakening."

"Strengthened public financial management (PFM) systems have not been matched with significantly increased use by development partners."

"The enabling environment for civil society organisations is deteriorating."

Hence, it found that 

"Improving the quality of public-private dialogue (PPD) in partner countries requires increased capacity, strengthened relevance and the inclusion of a wide range of private sector actors." 

and called for 

"More systematic and meaningful consultations with development actors are needed both by partner country governments and development partners."

Hubconsult Approach

Our guiding approach is as follows:

- Government strategy itself should ideally reflect the priorities and preferences of its citizens, expressed on data collected from the bottom up

- Policy should reflected in well formulated strategies and action plans. 

- these action plans contain multi-annual budget information and SMART indicators for M&E purposes

- These plans will reveal which activities the Government can achieve and those which it cannot (due to funding or capacity)

- the gaps help guide the Government on which activities it seeks support from donors or private sector partners

- the Government leads and coordinates donor requests and funding through its Donor Coordination Unit (DCU)

- the coordination of this process itself may require a strengthened capacity which the Government may request

- the Government should include all donor funds in cash or in kind in its budget and accounts, and audited by its Supreme Audit Institution (SAI)

- the Government's DCU should enter all projects in a publicly available, and real-time data source, such as a google sheet for easy access , allowing for limited collaboration by citizens, CSOs and other donors and partners 

By controlling and leading the process, the Government will aim to:

- ensure that the most relevant projects and interventions are targeted first, and respect the citizens' priorities

- plan according to a critical path, placing those projects with a higher ratio of Benefits to Cost first

- actively use Government's own Strategy and Action Plans as working documents

- deter the frequent practice of drafting numerous strategies which remain unused, yet which add to confusion about strategic direction 

- avoid duplication of projects

- avoid unwanted projects (these projects have a very limited chance of project success)

- encouraging transparency and citizen participation in governance

Challenges

Assistance in donor coordination will be most effective when received by those who have asked for support, just like aid itself. 

The challenges vary from situation to situation:

1. Existing donor coordination by donors rather than by Government.

The difficulty of some donor coordination efforts is they are sponsored by one of the very donors which needs to be coordinated. Donors also operate in a competitive area, so there is a great temptation to see coordination through the lens of a "leading" donor.  That normally equates to the one with the largest aid budget. 

 

2. Politicisation of Aid Flows

These are likely to be accompanied by lower levels of transparency are may be ill-suited to the strategy and action plans. 

 

3. Possible lack of appreciation of need for donor coordination by Government

Given the large appetite for funding by donors, Governments can be dissuaded from appreciating the scarcity of funding and the need for effective coordination. However, while there may be a lot of funding available, relative to the need for funds or Government's own budgets, it may be insignificant. This scenario varies very much from country to country. 

 

4. The need for coordination at sub-national levels, supra-national or regional level, 

Ideally, the recipient Government should coordinate in “3-D”, considering not only the sectors and time periods, but also levels of decentralisation. This of course, raises the bar in terms of  information requirements and organisation. 

 

5. Poor capacity for donor coordination led by Government

When coordinated by Government, Donor Coordination Units (DCUs) are usually hosted in a powerful Ministry such as the Ministry of Finance (MoF) or integrated into the Office of the Prime Minister or President. The DCU should indeed be coordinated by Government at senior level. However, the results of that coordination are variable as indicated. We know from Functional Reviews that many senior personnel positions in Ministry organigrammes are not filled, or the required capacity and skills are lacking, rendering poor results.  

 

6. Low appetite for Open Data 

Open data should be a cornerstone of donor coordination, since it allows the planning, implementation and monitoring through the project cycle by all interested stakeholders. To the extent that donors or Governments hide behind confidentiality, the effectiveness of donor coordination by Government is likely to be diminished. 

 

Using this form

We have designed a survey of donor coordination practices in your country. Forms submitted by Government, donors and other stakeholders, and citizens are welcome since they will help to form a fuller picture of coordination needs.

 

In the first instance, we would like to take stock of your donor coordination practices and needs. 

 

It would be ideal in the longer term, if the Government chooses, that the plethora of donor interventions should be visible as part of Government’s own planning and accessible to all stakeholders. Successful donor coordination is all about squeezing more value from donor resources for the benefit of your country’s citizens!

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