Aid policy and financing

The Highly Indebted Poor Countries (HIPC) initiative – World Bank and IMF: The HIPC initiative for debt relief of highly indebted poor countries, proposed in 1996 and enhanced in 1999, provides significant relief to countries with unsustainable debt burdens. International Development Association (IDA) and Poverty Reduction and Growth Facility (PRGF) (see below) eligibility are required.

The Sector Wide Approach (SWAp) – WHO and World Bank: The Sector-Wide Approach (SWAp) represents a recipient-led approach to managing development assistance on a sector-wide basis. Originating in the health and education sectors, SWAps may in principle apply in any sector.

Commission on Macroeconomics and Health: The Commission on Macroeconomics and Health (CMH) was an initiative of the WHO Director-General. The Commission's 2001 report outlined linkages between overall economic development and health conditions, set out the cost of a limited set of health services close to the patient or client, and called for developed countries to resolve that lack of donor funds should not be the factor that limits the capacity to provide health services to the world's poorest peoples.

Comprehensive Development Framework (CDF): The Comprehensive Development Framework (CDF) articulated by the President of the World Bank in 1997 is intended to serve as the foundation for new country-led partnerships between developing countries and their partners to achieve improvements in sustainable growth and poverty reduction, in order to facilitate achievement of the MDGs.

Harmonisation of development assistance – OECD/DAC: Harmonisation of development assistance policies, procedures, tools and practices was endorsed at a high level forum of the Development Assistance Committee (DAC) of the OECD in 2003. Since that time an increasingly intensive program of donor collaboration on harmonisation has been established.

Millennium Challenge Account: The Millennium Challenge Account (MCA) responds to the US pledge at the Monterrey Conference to increase development assistance by 50 percent. It provides for establishment of a new independent Millennium Challenge Corporation (MCC) to provide MCA development assistance but only to countries that have created an appropriate environment for economic growth by 'ruling justly,' 'investing in their people,' and 'encouraging economic freedom.'

Medium Term Expenditure Framework – World Bank and IMF: The MTEF is a transparent budget planning and budget formulation process in which core agencies establish 'contracts' for allocating public resources to strategic priorities while ensuring fiscal discipline, within a medium term economic perspective.

Poverty Reduction and Growth Facility – IMF: The Poverty Reduction and Growth Facility (PRGF) of the International Monetary Fund (IMF) was established in 1999 to make the objectives of poverty reduction and growth more central to the lending operations of the IMF in its poorest members countries.

Poverty Reduction Support Credits – World Bank: Poverty Reduction Support Credits (PRSC) financially assist IDA-eligible countries to implement policy and institutional reforms needed to help implement the country's poverty reduction strategy. Resources are unrestricted in their use. Grounded in the country's PRSP and the MDGs, a PRSC draws from and elaborates on the PRSP with a multiyear matrix of policy and institutional reforms and associated results-focused monitoring indicators and progress benchmarks.

Poverty Reduction Strategy Papers – World Bank and IMF: Poverty Reduction Strategy Papers (PRSP) set out poverty reduction strategies to serve as the basis for all World Bank and IMF concessional lending and for HIPC debt relief. The strategies are expected to be country-driven, results-oriented, comprehensive in recognising the multidimensional nature of poverty, partnership oriented involving participation of local and international partners, and based on a long-term perspective for poverty reduction.