Aid Effectiveness

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Aid Effectiveness

The Paris Declaration on Aid Effectiveness

Statement of Resolve

We, Ministers of developed and developing countries responsible for promoting development and Heads of multilateral and bilateral development institutions, meeting in Paris on 2 March 2005, resolve to take far-reaching and monitorable actions to reform the ways we deliver and manage aid as we look ahead to the UN five-year review of the Millennium Declaration and the Millennium Development Goals (MDGs) later this year. As in Monterrey, we recognise that while the volumes of aid and other development resources must increase to achieve these goals, aid effectiveness must increase significantly as well to support partner country efforts to strengthen governance and improve development performance. This will be all the more important if existing and new bilateral and multilateral initiatives lead to significant
further increases in aid.

At this High-Level Forum on Aid Effectiveness, we followed up on the Declaration adopted at the High-Level Forum on Harmonisation in Rome (February 2003) and the core principles put forward at the Marrakech Roundtable on Managing for Development Results (February 2004) because we believe they will increase the impact aid has in reducing poverty and inequality, increasing growth, building capacity and accelerating achievement of the MDGs.

Scale up for more effective aid

We reaffirm the commitments made at Rome to harmonise and align aid delivery. We are encouraged that many donors and partner countries are making aid effectiveness a high priority, and we reaffirm our commitment to accelerate progress in implementation, especially in the following areas:

  • Strengthening partner countries’ national development strategies and associated operational frameworks (e.g., planning, budget, and performance assessment frameworks).
  • Increasing alignment of aid with partner countries’ priorities, systems and procedures and helping to strengthen their capacities.
  • Enhancing donors’ and partner countries’ respective accountability to their citizens and parliaments for their development policies, strategies and performance.
  • Eliminating duplication of efforts and rationalising donor activities to make them as cost-effective as possible.
  • Reforming and simplifying donor policies and procedures to encourage collaborative behaviour and progressive alignment with partner countries’ priorities, systems and procedures.
  • Defining measures and standards of performance and accountability of partner country systems in public financial management, procurement, fiduciary safeguards and environmental assessments, in line with broadly accepted good practices and their quick and widespread application.

We commit ourselves to taking concrete and effective action to address the remaining challenges, including:

  • Weaknesses in partner countries’ institutional capacities to develop and implement results-driven national development strategies.
  • Failure to provide more predictable and multi-year commitments on aid flows to committed partner countries.
  • Insufficient delegation of authority to donors’ field staff, and inadequate attention to incentives for effective development partnerships between donors and partner countries.
    iv. Insufficient integration of global programmes and initiatives into partner countries’ broader development agendas, including in critical areas such as HIV/AIDS.
  • Corruption and lack of transparency, which erode public support, impede effective resource mobilisation and allocation and divert resources away from activities that are vital for poverty reduction and sustainable economic development. Where corruption exists, it inhibits donors from relying on partner country systems.

We acknowledge that enhancing the effectiveness of aid is feasible and necessary across all aid modalities.

In determining the most effective modalities of aid delivery, we will be guided by development strategies and priorities established by partner countries. Individually and collectively, we will choose and design appropriate and complementary modalities so as to maximise their combined effectiveness.

In following up the Declaration, we will intensify our efforts to provide and use development assistance, including the increased flows as promised at Monterrey, in ways that rationalise the often excessive fragmentation of donor activities at the country and sector levels.

Adapt and apply to differing country situations

Enhancing the effectiveness of aid is also necessary in challenging and complex situations, such as the tsunami disaster that struck countries of the Indian Ocean rim on 26 December 2004. In such situations, worldwide humanitarian and development assistance must be harmonised within the growth and poverty reduction agendas of partner countries.

In fragile states, as we support state-building and delivery of basic services, we will ensure that the principles of harmonisation, alignment and managing for results are adapted to environments of weak governance and capacity.

Overall, we will give increased attention to such complex situations as we work toward greater aid effectiveness.

Specify indicators, timetable and targets

We accept that the reforms suggested in this Declaration will require continued high-level political support, peer pressure and coordinated actions at the global, regional and country levels. We commit to accelerate the pace of change by implementing, in a spirit of mutual accountability, the Partnership Commitments presented in Section II and to measure progress against 12 specific indicators that we have agreed today and that are set out in Section III of this Declaration.

As a further spur to progress, we will set targets for the year 2010. These targets, which will involve action by both donors and partner countries, are designed to track and encourage progress at the global level among the countries and agencies that have agreed to this Declaration. They are not intended to prejudge or substitute for any targets that individual partner countries may wish to set. We have agreed today to set five preliminary targets against indicators. We agree to review these preliminary targets and to adopt targets against the remaining indicators before the UNGA Summit in September 2005; and we ask the partnership of donors and partner countries hosted by the DAC to prepare for this urgently. In accordance with paragraph 9 of the Declaration, the partnership of donors and partner countries hosted by the DAC (Working Party on Aid Effectiveness) comprising OECD/DAC members, partner countries and multilateral institutions, met twice, on 30-31 May 2005 and on 7-8 July 2005 to adopt, and review where appropriate, the targets for the twelve Indicators of Progress. At these meetings an agreement was reached on the targets presented under Section III of the present Declaration.

This agreement is subject to reservations by one donor on (a) the methodology for assessing the quality of locally-managed procurement systems (relating to targets 2b and 5b) and (b) the acceptable quality of public financial management reform programmes (relating to target 5a.ii). Further discussions are under way to address these
issues. The targets, including the reservation, have been notified to the Chairs of the High-level Plenary Meeting of the 59th General Assembly of the United Nations in a letter of 9 September 2005 by Mr. Richard Manning, Chair of the OECD Development Assistance Committee (DAC).

Meanwhile, we welcome initiatives by partner countries and donors to establish their own targets for improved aid effectiveness within the framework of the agreed Partnership Commitments and Indicators of Progress. For example, a number of partner countries have presented action plans, and a large number of donors have announced important new commitments. We invite all participants who wish to provide information on such initiatives to submit it by 4 April 2005 for subsequent publication.

Monitor and evaluate implementation

Because demonstrating real progress at country level is critical, under the leadership of the partner country we will periodically assess, qualitatively as well as quantitatively, our mutual progress at country level in implementing agreed commitments on aid effectiveness. In doing so, we will make use of appropriate country level mechanisms.

At the international level, we call on the partnership of donors and partner countries hosted by the DAC to broaden partner country participation and, by the end of 2005, to propose arrangements for the medium term monitoring of the commitments in this Declaration. In the meantime, we ask the partnership to co-ordinate the international monitoring of the Indicators of Progress included in Section III; to refine targets as necessary; to provide appropriate guidance to establish baselines; and to enable consistent aggregation of information across a range of countries to be summed up in a periodic report. We will also use existing peer review mechanisms and regional reviews to support progress in this agenda. We will, in addition, explore independent cross-country monitoring and evaluation processes – which should
be applied without imposing additional burdens on partners – to provide a more comprehensive understanding of how increased aid effectiveness contributes to meeting development objectives.

Consistent with the focus on implementation, we plan to meet again in 2008 in a developing country and conduct two rounds of monitoring before then to review progress in implementing this Declaration.

Partnership Commitments

Developed in a spirit of mutual accountability, these Partnership Commitments are based on the lessons of experience. We recognise that commitments need to be interpreted in the light of the specific situation of each partner country.

Ownership

Partner countries exercise effective leadership over their development policies, and strategies and co-ordinate development actions.

Partner countries commit to:

  • Exercise leadership in developing and implementing their national development strategies -the term “national development strategies” includes poverty reduction and similar over arching strategies as well as sector and thematic strategies – through broad
    consultative processes.
  • Translate these national development strategies into prioritised results-oriented operational programmes as expressed in medium-term expenditure frameworks and annual budgets (Indicator 1).
  • Take the lead in co-ordinating aid at all levels in conjunction with other development resources in dialogue with donors and encouraging the participation of civil society and the private sector.

Donors commit to respect partner country leadership and help strengthen their capacity to exercise it. Alignment Donors base their overall support on partner countries’ national development strategies, institutions and procedures.

Donors align with partners’ strategies

Donors commit to:

  • Base their overall support — country strategies, policy dialogues and development co-operation programmes – on partners’ national development strategies and periodic reviews of progress in implementing these strategies (Indicator 3). This includes for example the Annual Progress Review of the Poverty Reduction Strategies (APR).
  • Draw conditions, whenever possible, from a partner’s national development strategy or its annual review of progress in implementing this strategy. Other conditions would be included only when a sound justification exists and would be undertaken transparently and in close consultation with other donors and stake holders.
  • Link funding to a single framework of conditions and/or a manageable set of indicators derived from the national development strategy. This does not mean that all donors have identical conditions, but that each donor’s conditions should be derived from a common streamlined framework aimed at achieving lasting results.

Donors use strengthened country systems

Using a country’s own institutions and systems, where these provide assurance that aid will be used for agreed purposes, increases aid effectiveness by strengthening the partner country’s sustainable capacity to develop, implement and account for its policies to its citizens and parliament. Country systems and procedures typically include, but are not restricted to, national arrangements and procedures for public financial management, accounting, auditing, procurement, results frameworks and monitoring.

Diagnostic reviews are an important – and growing – source of information to governments and donors on the state of country systems in partner countries. Partner countries and donors have a shared interest in being able to monitor progress over time in improving country systems. They are assisted by performance assessment frameworks, and an associated set of reform measures, that build on the information set out in diagnostic reviews and related
analytical work.

Partner countries strengthen development capacity with support from donors

The capacity to plan, manage, implement, and account for results of policies and programmes, is critical for achieving development objectives – from analysis and dialogue through implementation, monitoring and evaluation.

Capacity development is the responsibility of partner countries with donors playing a support role. It needs not only to be based on sound technical analysis, but also to be responsive to the broader social, political and economic environment, including the need to strengthen human resources.

Untie aid: getting better value for money

Untying aid generally increases aid effectiveness by reducing transaction costs for partner countries and improving country ownership and alignment. DAC Donors will continue to make progress on untying as encouraged by the 2001 DAC Recommendation on Untying Official Development Assistance to the Least Developed Countries (Indicator 8).

List of Participating Countries and Organisations in the Paris Declaration on Aid Effectiveness

Participating Countries

Albania Australia Austria Bangladesh
Belgium Benin Bolivia Botswana
Brazil Burkina Faso Burundi Cambodia
Cameroon Canada China Congo D.R.
Czech Republic Denmark Dominican Republic Egypt
Ethiopia European Commission Fiji Finland
France Gambia, The Germany Ghana
Greece Guatemala Guinea Honduras
Iceland Indonesia Ireland Italy
Jamaica Japan Jordan Kenya
Korea Kuwait Kyrgyz Republic Lao PDR
Luxembourg Madagascar Malawi Malaysia
Mali Mauritania Mexico Mongolia
Morocco Mozambique Nepal Netherlands
New Zealand Nicaragua Niger Norway
Pakistan Papua New Guinea Philippines Poland
Portugal Romania Russian Federation Rwanda
Saudi Arabia Senegal Serbia and Montenegro Slovak Republic
Solomon Islands South Africa Spain Sri Lanka
Sweden Switzerland Tajikistan Tanzania
Thailand Timor-Leste Tunisia Turkey
Uganda United Kingdom United States of America Vanuatu
Vietnam Yemen Zambia

Participating Organisations

African Development Bank Arab Bank for Economic Development in Africa
Asian Development Bank Commonwealth Secretariat
Consultative Group to Assist the Poorest (CGAP) Council of Europe Development Bank (CEB)
Economic Commission for Africa (ECA) Education for All Fast Track Initiative (EFA-FTI)
European Bank for Reconstruction and Development (EBRD) European Investment Bank (EIB)
Global Fund to Fight Aids, Tuberculosis and Malaria G24
Inter-American Development Bank International Fund for Agricultural Development (IFAD)
International Monetary Fund (IMF) International Organisation of the Francophonie
Islamic Development Bank Millennium Campaign
New Partnership for Africa’s Development (NEPAD) Nordic Development Fund
Organisation for Economic Co-operation and Development (OECD) Organisation of Eastern Caribbean States (OECS)
OPEC Fund for International Development Pacific Islands Forum Secretariat
United Nations Development Group (UNDG) World Bank

Civil Society Organisations

Africa Humanitarian Action
AFRODAD
Bill and Melinda Gates Foundations
Canadian Council for International Cooperation (CCIC)
Comité Catholique contre la Faim et pour le Développement (CCFD)
Coopération Internationale pour le Développement et la Solidarité (CIDSE)
Comisión Económica (Nicaragua)
ENDA Tiers Monde
EURODAD
International Union for Conservation of Nature and Natural Resources (IUCN)
Japan NGO Center for International Cooperation (JANIC)
Reality of Aid Network
Tanzania Social and Economic Trust (TASOET)
UK Aid Network

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