• Aid harmonisation

Aid harmonisation

High on the agenda for developing countries at the Accra High Level Forum on aid effectiveness was a commitment to use developing country systems (alignment) and to regulate division of labour (harmonisation). Regarding alignment donor governments agreed to channel at least 50% of aid through developing country systems. As for ‘donor harmonisation’, no specifics were given except for a call for donors to ‘harmonise their assistance proactively’. So in the months since the September meeting in Accra has policy changed? Are donor governments now actively implementing recipient countries’ demands in these areas?

This paper studies ‘post- Accra’ donor policy from the US, the UK and Europe. Using Ghana and Tanzania as ‘examples’ the authors also interviewed donor government officials to ascertain current practice in light of Accra. The authors’ findings include:

• trust in the quality of the budgetary and procurement systems is cited as a reason why donors do not use them. However, both Ghana and Tanzania score relatively high on the quality of their public financial management and procurement systems, but there has been little increase in donors’ use of them in the last few years
  
• legislative resistance to budget support has influenced a number of European countries’ use of budget support - Sweden being one example. The U.S. Congress is also extremely unsupportive of aid modalities such as budget support or even sector budget support
  
• with regard to division of labour, health and education are the two sectors that tend to have the highest numbers of donors. This is not surprising as they are “sexier” for the donor public, they receive support from civil society, and they involve less risk than investing in infrastructure or agriculture. Donors are therefore reluctant to withdraw their spending and invest it elsewhere
  
• leadership by the government in the developing country has a significant impact. Leadership within the last Tanzanian administration resulted in an ambitious JAS (Joint Assistance Strategies) that forced donors to improve at least their information sharing and their coordination

To address both harmonisation and alignment, the authors’ recommend:

• funding should be provided to sensitise parlimentarians in developing countries about the impact their demands have on the capacity of developing country legislators to scrutinise budgets and policies
  
• donors should support more cross-country lesson sharing on the use of country systems and good practice in division of labour. They should support developing countries to present their own analysis and lessons learned rather than a process that is centred on donor reports
  
• all donors should ensure that division of labour and donor withdrawal from certain sectors/countries is coordinated with recipient countries and other donors so that it does not result in gaps in funding or expertise
  

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