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Capacity-absorption limits on aid effectiveness
The implementation of a number of aid projects/programmes demonstrates the failure
to realize counterpart funding and local personnel from the GOT as originally anticipated.
The GOT often failed to honour its commitments.
Aid administration on the part of GOT and design of aid projects have assumed
forms that are more consistent with capacity-use or -depletion than capacity-building.
In a situation of low government capacity for economic management, it seems logical
to allocate more aid towards building up that capacity. The challenge is how the future
administration of aid projects can be arranged to make less intensive use of the limited
capacity of the government’s administrative machinery, and whether the allocation
of aid can be shifted in favour of capacity- building in areas where it is limited, such
as economic management.
Capacity building and continuity within institutions
This study has found that many Danish assistance programmes were more successful
in attaining immediate objectives than in respect of longer-term capacity building objectives.
This is in accordance with observations made in various evaluations of other
donor-assisted programs.
Unconducive working conditions
One major factor which reduces the effectiveness of capacity-building projects in economic
management is the unconducive working conditions, especially the unrealistically
low levels of wages and salaries. The perception of this threat and unfavourable
working conditions continues to strangle efforts at civil service reform and make it difficult
for either staff or institutions to give adequate attention to the longer-term demands
on economic management. Existing capacities cannot be fully utilized under
these conditions.
Weak aid coordination
Donor-aid coordination falls under three categories, namely intra-government coordination,
donor-donor coordination and government donor-coordination. Intra-governmental
aid management is currently at its weakest with regard to the overall aid-management
process.
There are two types of donor-donor aid coordination. Donors may coordinate their
activities themselves or (more importantly) they may be coordinated by GOT. Of these
two, the former has a formal existence, while the latter is weak.
A major constraint in achieving aid coordination is the lack of demand for it. A local
constituency that is demanding improved aid coordination is only beginning to emerge.
. Also, interest in the possibility of playing off one donor against another and thus
obtaining access to donor funds has delayed any moves towards aid coordination. For
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