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Linking our other work with PRS is the main rationale for

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Linking our other work with PRS is the main rationale for

    Principles for Promoting Harmonisation

    and Aid Effectiveness

    DRAFT TWO

    This (draft) ‘Principles for Promoting Harmonisation’ is based on two local DAC ththmeetings held on 7 and 20 February 2002. It is to be read in conjunction with ‘Programme of Action for Improved Harmonisation’, which contains specific actions

    suggested by DAC members. These principles represent a general framework which is to

    form the basis for consultation with Government.

    Prepared by Tanzania DAC Secretariat th20 March 2002

    Principles for Promoting Harmonisation and Aid Effectiveness

Section One: General Principles

    1. The Poverty Reduction Strategy (PRS) is the dominant instrument and overarching objective for Government and development partners. Efficiently/effectively linking our

    work with PRS is the main rationale for harmonisation.

    2. However framed (harmonisation, effectiveness, transaction costs) we must evaluate our performance in terms of facilitating Government delivery of the PRS outcomes.

    3. TAS is to be used by DAC members to articulate the entry-point for delivering development assistance, establishing principles for how we work and engage in key

    processes such as the PRS, PER/MTEF and poverty monitoring.

    4. The DAC is a heterogeneous body but scope for collaboration in key areas should be promoted. Forming smaller groups, however, to address specific coordination issues is

    desirable where broader consensus cannot be established.

    5. The principle of inclusivity must be observed. Financing modalities or agency-specific procedures should not exclude any development partner from participating in

    DAC/Government work related to harmonisation/coordination and implementation of the PRS.

    6. Reducing our own transaction costs should also lower Government transaction costs (and vice versa). There must be a ‘win-win solution’: not simply transferring transaction

    costs from one side to the other.

    7. Each DAC member should maintain regular contact with their headquarters (and field staff) so that constraints to harmonisation can be acknowledged at an early stage and

    solutions identified. This includes synchronising headquarter missions in line with the

    calendar of key processes and joint missions (Annex 1). Establishing credible national

    processes is therefore a precondition for imposing discipline at headquarter and field level. 8. There should be ‘quiet times’ when no missions or consultations with Government are held.

    9. Aid coordination is not a costless exercise. Where necessary, cost sharing arrangements should be considered.

Principles for Improved Harmonisation Page 1

Section Two: Consultative Group Meeting (CGM)

    10. The CGM is to be held every year. CGMs will be linked to the PRS review. The CGM is still evolving and can be reviewed on an ongoing basis.

    11. The role of the formal CGM is to discuss/gauge progress in major areas (eg PRS and broader reforms) and to map a way forward.

    12. Joint statements are to be retained and used to structure priorities for future action (as per Governance group, CG 2001). Partners should also prepare more thoroughly for

    discussions.

    13. Civil society is to be invited to attend the formal session as observers and dissemination of information is to be improved.

    14. The role of the informal CGM is to discuss sectoral/thematic concerns and address all issues likely to be raised in formal session.

    15. The informal session will precede the formal session. Main civil society / private sector input is to be in the informal session.

Section Three: Joint Sector Reviews/Missions

    16. Joint missions should move to replace bilateral consultations (and not present an additional burden on Government). The timing and format of reviews must complement

    key processes such as the PRS Review, the PER and the budget exercise.

    17. A silent partner and/or lead agent approach can reduce the transaction costs of both development partners and the Government

    18. A functioning sector wide approach (SWAp) is the starting point for joint missions. SWAps imply much more than joint financing mechanisms (see Section Five).

    19. Basket reviews are necessary for accountability but should form a smaller component of a larger joint sector review. The sector review should address all resource issues

    20. Joint reviews must be inclusive and open to all stakeholders. This should be reflected in the Terms of Reference for the joint review.

    21. Technical and policy reviews should be linked (to each other and to PER/MTEF, PRS) 22. Smaller groups of partners may choose to begin joint reviews/missions in the absence of a comprehensive review/mission.

    23. Sharing of bilateral reports can preclude repetitive missions. Sector working groups and the annual review should establish a common agenda of analytical work.

    Principles for Improved Harmonisation Page 2

Section Four: Reflecting Development Assistance in the Budget

    24. The DAC target is to include all development assistance in the budget book for FY03 (submission deadline in April 2002).Exceptions would be IMF PRGF assistance

    (disbursed to central bank) and some assistance to NGOs and private sector.

    25. The DAC target is to provide information on all development assistance to the Ministry of Finance for recording in the External Finance Department database for FY03

    MTEF (submission deadline in November 2002).

    26. The DAC target is for [50%] of appropriate development assistance to be recorded in Government accounts in FY03. [16% average coverage was achieved in FYs 1999 and

    2000 according to January 2002 PER Report]

    27. Sector work should include a consideration of external resource mobilisation, in the context of the PER/MTEF exercise and in consultation with Ministry of Finance.

Section Five: Working More Effectively at Sector/Thematic Level

    28. There are too many partners in too many sectors: the concept of selectivity should be promoted. Partners should seek to work in fewer sectors and focus their expertise.

    29. Sector/thematic working groups (SWG) should, wherever possible, be led/chaired by Government. In the short-term it may be necessary, however, to continue with parallel

    DAC-only mechanisms. In particular circumstances, some sectors (e.g. private sector)

    may continue to be organized/chaired at the DAC level.

    30. Inclusivity. All partners, whatever the modality of their assistance, should be represented (possibly as a silent partner) in a single SWG that focuses on policy, strategy and service delivery.

    31. Development partners participating in the SWG should endeavor to communicate with Government through a ‘lead donor’ and with a common voice.

    32. Government reporting mechanisms should be improved and developed so that they can be adopted by partners. As this is accomplished, partners should seek to assimilate

    their own systems with the Government format.

    33. A sector review should provide the single opportunity for all development partners to comprehensively review policy, strategy, performance and capacity needs (See Section

    Three).

    34. Basket/joint financing committees should only address administrative issues related to the basket, considering wider issues such as total sector funding only once they

    have been considered in the context of the SWAp. A more important objective is to

    ensure that all resources are reflected in the Government budget. Basket reviews,

    Principles for Improved Harmonisation Page 3

although necessary for accountability, should become a smaller component of a larger

    joint review.

    35. It is not unambiguously clear that basket funds have lowered transaction costs, built

    capacity or improved the level of service delivery. The requirement to sequence the

    implementation of the sector development plan implies that the formulation of strategy

    and capacity building (for budgeting/planning, implementation, reporting and M&E) are

    preconditions for basket funding.

    36. Composition of the SWG should include all relevant Government stakeholders,

    especially as service delivery becomes increasingly decentralised (e.g. PoRALG plus

    relevant sector ministry). Other stakeholders (e.g. civil society and non-Government

    providers of services) are also to be included.

    37. The work of the SWGs should be guided by a clear Terms of Reference and be

    managed by a competent Chair/Secretariat. The Terms of Reference may include the

    following:

    i. prescribe the processes for establishing, updating and reviewing the sector

    development plan (e.g. as part of joint review), including to assess the impact of

    the plan and the resources used;

    ii. detail the roles and responsibilities of each member of the SWG (i.e.

    Government departments, partners, other members each may perform

    different roles within the group according to area of competence);

    iii. formulate a calendar of major missions and evaluations so that they can be

    rationalized and structured;

    iv. ensure that explicit linkages are made to the targets included in the PRSP and

    that the sector development plan is consistent with the PRSP;

    v. ensure key inputs to the poverty monitoring system are made and to promote the

    integration of the poverty monitoring system’s findings into sector policy;

    vi. support the MTEF process by producing costed strategies and budgeting

    according to the ceilings identified in the budget guidelines;

    vii. address resource mobilisation, in the context of the preparation of sector MTEFs.

    This should be coordinated with the Ministry of Finance and be complementary

    to the PER/MTEF reporting exercise;

    viii. participate, as appropriate, in the production of the PER sector study (where

    applicable) and ensure linkages to joint sector review, PRS Review, budget

    process etc;

    ix. consider capacity needs and other absorption constraints with regard to

    planning/budgeting, implementation, monitoring/evaluation and

    reporting/accountability;

    x. form coherent strategy to address capacity building needs, including use of

    pooled technical assistance where appropriate;

    xi. develop common reporting formats;

    xii. incorporate cross-cutting issues into the work of the sector; Principles for Improved Harmonisation Page 4

    xiii. assess scope for working more efficiently to lower transaction costs within the

    sector. Examples of what works (and what doesn’t) should be broadly

    disseminated through Government and the DAC;

    xiv. consider an annual programme of joint technical/analytical work (addressing

    priority areas identified at the joint review and in PER work);

    38. Coordinating the work of the SWG, as per the Terms of Reference above, is not costless. Where necessary, costs should be shared.

    39. Where appropriate, development partners can use their resources to assist Government in preparing technical work. In education, small sub-groups of partners have

    engaged at strategic levels and this may offer an example of good practice.

Section Six: Linking Sector/Thematic and Macro Work

    40. A calendar of key annual processes (Annex 1) should guide the work of sectors to ensure appropriate linkages to PER/MTEF, PRSP and poverty monitoring system. The

    calendar can also be used by the PRBS group to structure deliberations on levels of

    budget support.

    41. Timing/sequencing of key macro processes is an important factor in structuring engagement of sectors. The ‘Poverty and Human Development Report’ (the main output

    of the poverty monitoring system, proposed mid-April) will inform the PRS Review

    (proposed for mid-June). This, in turn, will be informed by the PER review meeting

    (May). Sectors (and others, e.g. TACAIDS, Planning, PoRALG, VPO) therefore need to

    structure their work around these processes, and the budget process, as well as

    contributing to the PRSP Technical Committee.

    42. Sectors must become fully engaged in PER and budget work, consolidating ownership beyond the central ministries. Sectors should establish mechanisms to link the

    budget (inputs) to service delivery (outputs/outcomes) through the PER and poverty

    monitoring system.

    43. Sector work must also be linked to other processes which impact on service delivery, such as decentralization and the Local Government Reform Programme.

    44. DAC input to the PRS Review process must be structured, coordinated and timely. Some partners will provide input through the poverty monitoring system, others through

    the SWG (and from there to the Government-only PRSP Technical Committee). Macro

    issues can be addressed through the PER and by the PRBS donors.

    45. The format/agenda/timing of the Consultative Group Meeting will be linked to the PRS Review.

Principles for Improved Harmonisation Page 5

Section Seven: Role of Monthly DAC Meetings

    46. The working principle of the DAC will evolve from one of information sharing to

    actively seeking ways to promote harmonisation, identify best practice and to ensure that

    work of respective members contributes to the key processes in Tanzania, in line with

    TAS.

    47. Improved linkages between the DAC and sector work should be made. The purpose of

    sector reporting to the DAC is not to address technical sector/thematic issues (these should

    be addressed in the SWG). Rather, the objective of reporting to the DAC should be:

    i) in the first instance, to consider composition/number of groups in the sector

    (DAC, Government etc); the status of a SWG Terms of Reference; the use of

    joint reviews; and

    ii) routinely, to report on linkages to key processes (PER/MTEF, PRSP, poverty

    monitoring system); modalities for addressing cross-sectoral issues; progress in

    harmonisation.

    48. The DAC may then:

    i) assimilate examples of best practice, identifying a methodology by which

    sector/thematic work can link to key processes;

    ii) ensure that best practice is disseminated;

    iii) address cross-sectoral issues more coherently;

    iv) gauge consistency of DAC assistance with TAS and assess quality of inputs to

    key processes; and

    v) ensure timely, comprehensive and coordinated inputs to the budget exercise,

    PRS Review and other major processes.

Principles for Improved Harmonisation Page 6

    Calendar of Major Processes and Missions

     January February March April May June July August September October November December Budget/MTEF

    Budget Sector MTEF preparation MTEF Preparation Budget Guidelines

    1. ToRs for PER background studies Consultation on scope of 2. External Background/Sector Studies PER Review Background/Sector Studies work resource mobilisation for budget guidelines PRS and 1.PRS Review Participatory National Poverty Poverty 2. National Poverty Poverty Monitoring Monitoring Poverty & Assessment Analysis Human Devt Report field work published Report

    PRBS

    Mid-Term Annual Review Review

    Consultative

    Group Quarterly

    Sector Meeting Review

    Meeting

    Development

    Co-Op Forum Major Health Joint IMF/WB Missions & IMF PRGF Education Review Annual Mission Review Meetings (2 wks) Meetings

    Principles for Improved Harmonisation Page 7

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