Reaching the marginalized: EFA global monitoring report, 2010; 2010

100CHAPTER 42Education for All Global Monitoring ReportThe quality of acountry’s publicfinancialmanagementsystem is a weakguide asto whetherdonors use it2009; de Renzio and Dorotinsky, 2007). However, thelatest OECD survey, from 2008, found that one-thirdof the forty-two low-income countries covered hadimproved their financial management systems byat least one measure in the Country Policy andInstitutional Assessment (CPIA), a World Bankdiagnostic tool that ranks performance on anascending scale from one to six (OECD, 2008a).Donors set an ambitious target of channelling80% of aid through national systems by 2010,but between 2005 and 2007 the actual amountincreased from 40% to just 45%. Moreover, thequality of a country’s public financial managementsystem is a weak guide as to whether donors use it,as Figure 4.11 illustrates. Bangladesh scores loweron the CPIA scale than Mozambique, Rwanda orZambia, yet has a far higher share of aid usingnational reporting systems.In any one country, donor perceptions of corruption,organizational incentives, legislation governing aid,the direction of reform and headquarters policiescan play a far more important role in shaping policythan a CPIA score. The extent to which individualdonors use national financial management systems9080varies widely (Figure 4.12). More than 60% of aidfrom France, Japan, the Netherlands, Spain andthe United Kingdom goes through national financialmanagement and procurement systems, comparedwith 35% of aid from the European Commission andonly 5% of United States aid. Some countries, suchas France and Spain, have been willing to channelaid through weak national systems while supportingefforts to strengthen them.Channelling aid through national systems givesaid-dependent countries far greater control overbudget planning and public spending, and reducesthe costly need to create parallel managementsystems. It makes little sense for the EuropeanCommission to require Zambia to meet separatereporting requirements when individual EUmembers are willing to work through the country’snational system. There is much greater scope fordonors to work creatively together in supportingand using effective national systems.Furthermore, scaling up aid to the required levelthrough current financial arrangements is nota viable option. It would entail a proliferation ofseparate and parallel management structuresFigure 4.11: The extent to which donors use recipients’ financial systems is not related to their qualityDonor use and quality of public financial management systems, 2007Bangladesh% of aid to government sector usingnational public financial management systems7060504030MalawiAfghanistanHaitiBurundiLao PDR20NigerCentral African RepublicMadagascarCape VerdeSierra LeoneSenegalMongoliaCambodiaPapua N. GuineaKyrgyzstan10MauritaniaTogoYemenSudan0Côte d’Ivoire Congo D. R. Nigeria1.5 2.0 2.5 3.0 3.5 4.0 4.5LowNepalKenyaCameroonBeninMozambiqueMaliQuality of public financial management system (CPIA score)ZambiaBoliviaU. R. TanzaniaViet NamUgandaHondurasGhanaNicaraguaEthiopiaBurkina FasoRwandaRep. MoldovaHighSource: OECD (2009a).236