Some early pointers on rural SWAps, alignment and division of labour

Three panel discussions at the Berlin Forum convened by the Platform brought together some pioneers of practical aid effectiveness to compare notes on their experience in the field. The panels discussed sector-wide approaches (SWAps) in agriculture and rural development, donor alignment with government strategies and, most controversially, the division of labour. Two Platform background papers, Joint Donor Minimum Standards for Effective ARD Programmes and the Joint Donor Concept for Rural Development, helped fuel the debate.

Here are some of the findings from the discussions around aid effectiveness issues in ARD:

SWAps for agriculture and rural development

A sector-wide approach (SWAp) is a national programme led by the host government and made up of donors and a broad range of domestic stakeholders that sets priorities and allocates all available resources to a single defined sector under a single policy and expenditure programme, using a uniform set of financial management procedures.

SWAps arose in the 1990s in response to the perceived failure of existing aid practices and delivery mechanisms. While quite successful in education and healthcare, the record so far for SWAps in agriculture and rural development is mixed.

The findings from this discussion:

• Rural SWAps take time to ripen. Most developing countries still have no clear and appropriate strategies and policies for SWAps in rural development. But the consensus in Berlin was that planning and implementing a SWAp in this notoriously complex and wide-ranging sector is difficult and time-consuming. Traditional project-cycles do not apply anymore. A 10-15 years time-line is more realistic.

“SWAps need to be long-term. Macroeconomic programmes like this can’t be implemented over a mere five years. Some donors still don’t see the need for co-ordination. They used to be in SWAps, but have now gone back to project implementation. That’s unacceptable. Long-term programmes need long-term donor commitment.”

Dr. Fernando Songane, Co-ordinator, PROAGRI, Mozambique

• Smaller SWAps are better. SWAps are most effective when planned and implemented at a sub-sector level. Experience so far suggests that a sector-wide approach to specific areas like agribusiness, extension or technology is more effective than seeking to stuff all the complexity and diversity of A&RD under a single SWAp umbrella.

• Who’s driving? The drivers of SWAps must be government ministries. Cooperation between interdependent ministries (e.g. finance, decentralisation, agriculture, health) is crucial. Ministries must form an alliance to coordinate policies and to jointly implement SWAPs, and then assign one ministry to lead it.

• Get it written down and codified. Memorandums of Understanding and Codes of Conduct for all stakeholders in the SWAp (public and private as well as donors) help define the different roles and responsibilities.

• Measure your progress. Donors and their partners must define indicators for success in SWAps, for example, quantifiable progress in reducing poverty and increasing economic growth. Some progress is already being made. The Global Donor Platform will shortly publish a monitoring and evaluation toolkit for agriculture.

• Good SWAps demand education, teaching and training. Donors must commit more funds to capacity-building, as this is a neglected but crucial element of success. SWAps pose unfamiliar and complex challenges, and stakeholders must be prepared to respond.

Alignment to national strategies and priorities

The Paris Declaration makes alignment one of the keys to greater aid effectiveness. Alignment demands that donors base their support on partner countries’ national development strategies, institutions and procedures. This implies, among other things, donor help in strengthening the financial management capacity and national procurement systems of host governments and also using these strengthened country systems to get better value for money.

Despite progress, a set of workable alignment practices still needs to be defined. Reasons include many of the same problems confronting SWAps. Some results:

• Get buy-in on measurements. Effective national funding and management mechanisms require well-defined performance indicators and accountability standards. These will be flawed if they are only donor-driven. Indicators and standards have to be pertinent, measurable and acceptable for donors and also feasible for the recipient country.

• Make it inclusive. Alignment has to be accompanied by effectively including other stakeholders, particularly the private sector and civil society in strategy formulation, policy planning and implementation.

“Only a small part of rural development is suited to government-to-government intervention. We need to use many other channels, in particular the private sector, the main engine of agriculture. That means, on the one hand, helping small farmers in developing countries to become small-scale entrepreneurs with sufficient understanding of global markets, and, on the other, ensuring that big business in our industrialised countries get engaged in development issues.”

Monique Calon, Senior Policy Advisor, Directorate for Sustainable Economic Development, Ministry of Foreign Affairs, The Netherlands

• Cope with conflicting trends. Donor alignment does not mean retreating to national capitals and encouraging a top-down approach. Donors need to manage the tensions between their need to align with government development strategy at the centre and the demands posed by decentralising agricultural policy at local levels.

• Don’t jump to conclusions. The process only started in 2005 and the evidence is only just starting to trickle in now. It is too early to link policies to outcomes. However, progress is being made in formulating policy and strategy as well as in setting up systems.

Aid effectiveness and the division of labour

Donors, development partners and programmes are proliferating. Debate on the division of labour among donors intensified in mid-2007 with Adoption of the European Commission’s Code of Conduct for donors.

The code’s 11 operating principles could give bold new impetus to the cause of aid effectiveness (see Too many donors? (link to Sidebar 2 in this package).

The messages from this panel:

• Who does what? At present, according to the EU Code of Conduct, individual donor agencies can define their own comparative advantage through self-analysis. It is doubtful, however, how objective such self-analysis can be, both within and between agencies. And any given donor agency’s comparative advantage needs the approval of rival donors and relevant host governments – a task likely to prove arduous. The Overseas Development Institute (ODI) has started a useful blog on this issue.

“My long-standing … view is that the best way to achieve [donor concentration] is by channelling a greater proportion of funds through multilateral organisations. The slogan should be ‘Don’t just harmonise, multilateralise’. The prospect of 56 bilateral donors and over 230 international organisations, funds and programmes, all manoeuvring to see which of them will be allowed to operate in specific sectors in particular countries, and which of them will lead on what, just seems to me like a recipe for bureaucratic gridlock and also a significant threat to quality. If aid does increase as we expect it to, then these problems can only become worse.”

Simon Maxwell, Director, Overseas Development Institute, United Kingdom

• Measure results on the ground. A better division of labour must lead to better results on the ground. That means donors must support national statistical agencies and avoid infighting over data collection. Evidence from early division of labour initiatives, in Zambia, for example, suggests that in ‘silent partnerships’ between donor agencies on who takes the lead and who follows in any given programme, there must be clear agreement up front on whose results count.

• Set milestones and incentives. For an effective division of labour between donors, we need clear political agreements between organisations as well as incentives for individuals, like reward schemes and career opportunities. It is still unclear what the rewards and sanctions at an individual and institutional level really should be. In the end, given that the division of labour remains essentially a voluntary and non-coercive process for the time being, a lot is up to the decisions of individuals.

• Things will first get more difficult. In the short-to-medium term, as the sea-change in development assistance gets underway, donor transaction costs are set to rise. However, these should be measured against the pay-off, in other words the quality of impact and outcomes.

For papers and background documents from these discussions, see www.ruralforum.info/en/topics/effectiveness