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

THE AID COMPACT: FALLING SHORT OF COMMITMENTSAid for educationthat would overload the capacity of developingcountries, divert scarce human resources fromnational planning, weaken budget systems andultimately diminish the effectiveness of aid.Aligning aid and coordinating activityAll donors are committed in their policystatements to aligning their activities with theplans of recipient governments. Better alignmentalso means improved coordination, with donorsworking collectively to support the goals set outin national plans.One indicator of progress in this regard is theshare of programme-based aid. In 2005–2006,it accounted for some 54% of all aid to basiceducation, compared with 31% in 1999–2000. InBangladesh, donors have formed a consortium thatworks with the government on a unified programmeof support for primary education. Mozambique andZambia have also seen a strong shift towards pooledfunding for education, with donors working togetherthrough national systems and shared reportingstructures. In some cases, donors have cooperatedin supporting reforms in planning, reporting andauditing to facilitate a pooled financing arrangementand the scaling up of aid in support of the nationaleducation strategy (Box 4.6).While improved donor coordination is deliveringresults, it can give rise to new tensions.Negotiations between aid-dependent countriesand groups of like-minded donors can reinforceunequal power relationships (Abou Serie et al.,2009). In the United Republic of Tanzania,Education Ministry officials saw dialogue withdonors as a source of intrusion, while donorsreported concerns over a perceived exclusionfrom discussions over programme implementation(Box 4.7). Such tensions highlight the complexityof aid partnerships and the importance of settingclear parameters for donor influence.Managing for resultsUnder the Paris Declaration on Aid Effectiveness,developing country governments committed tostrengthening monitoring of the progress that aid isintended to facilitate and donors pledged to supportthese efforts and to use national data. ‘Managing forresults’ is the shorthand description of this approach.There is some evidence that the stronger focuson results is influencing national educationprogrammes supported by aid. In Bangladesh, forexample, the national primary education programmeFigure 4.12: The use of recipient financial management systems varies by donorSelected donors’ use of national public financial management systems, 2007IrelandSpainJapanNetherlandsFranceNorwayDenmarkFinlandUnited KingdomWorld BankSwedenItalyGermanyCanadaAsian Development BankAfrican Development BankAustriaSwitzerlandIDBEuropean CommissionBelgiumAustraliaNew ZealandUnited StatesPortugalLuxembourgSource: OECD (2009a).0 10 20 30 40 50 60 70 80 90Average percentage of aidto the government sector using national publicfinancial management and procurement systemsBox 4.6: Nicaragua — strengthening managementsystems through aid alignmentRecent experience from Nicaragua highlights the importance of trustand good communication between government officials and donorsin strengthening management systems to increase aid alignment.With the adoption of the National Education Plan in 2001, Nicaraguaset out to harmonize external aid to education. Several instrumentswere introduced for managing aid, with an emphasis on using nationalprocedures for financial planning, reporting, auditing and procurement.A pooled fund financed by Canada, Denmark and the Netherlands hasbeen a particularly important resource. It provides predictable finance,which can be used flexibly to pay for non-salary activities agreed inthe Education Ministry’s annual plan.The introduction of the pooled fund required a strengthening ofnational management and planning capacities. Close dialogue andfrank discussions between senior officials and donors on keymanagement elements were critical to the successful managementof the pooled funds. Donors have also agreed to accept a single financialaudit for the entire annual budget, replacing multiple donor audits.Source: Jané (2008).237