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1 Introduction 1, 2 Strengths and weaknesses of the Paris Declaration aid effectiveness model 2. 3 Issues in a strengthened international framework for aid effectiveness 4. 4 Improving clarity and monitorability of indicators in the Paris Declaration 13. 5 Transparency and inclusiveness of monitoring and mutual accountability 16. 6 Recognising the implications of a more diverse set of actors 17. 7 From a technical to a political agenda 21, 8 Possible priorities for the DCF short and medium term 22. 9 Recommendations 24,1 Introduction, 1 As part of the substantive preparations for the first biennial high level Development. Cooperation Forum DCF in July 2008 the Department of Economic and Social Affairs of the. United Nations UNDESA is undertaking a review of recent trends and progress in international. development cooperation This review will inform the analytical report of the Secretary General. which will serve as the main background document for the DCF The present study which. focuses on a strengthened framework for aid effectiveness is part of this analytical effort 1. 2 For many countries receiving aid the effectiveness of aid is one crucial factor for achieving. sustainable development results For any country providing resources to other countries. questions as to the value and priority of such spending have to be addressed It is therefore. surprising that no coordinated attempt to establish an agenda for improving the effectiveness of. aid was established internationally in the Twentieth Century Of course numerous efforts to. improve effectiveness of both the delivery and the in country management of aid of aid were. made both by individual countries receiving or providing aid and in regional groupings eg the. Strategic Partnership for Africa SPA and the European Union among groups of institutions. such as the UN family and the international financial institutions or among donors in the OECD. Development Assistance Committee DAC But these efforts were quite disparate and no. concerted effort was made to address the topic across all the many stakeholders. 3 The last few years have at last seen a gradually expanding effort to build a greater. international consensus on how to pursue the objective of more effective aid The Monterrey. Consensus of 2002 encouraged greater attention to the issue The High Level Forums in Rome. 2003 and Paris 2005 have resulted in a growing consensus on some key principles. ownership alignment harmonisation management for results and mutual accountability and. a monitorable set of indicators The Paris Declaration was itself referred to positively in the. UN Summit declaration of September 2005, 4 However the Paris High Level Forum though co sponsored by UNDP as well as by the. OECD World Bank and the European Union was not formally speaking a UN event and the. Declaration has no formal international status Participation by recipient countries was not. universal and on the side of countries and institutions providing cooperation the discussions. were dominated by members including observer members of the DAC In addition although. several non governmental organisations attended the Paris High Level Forum their participation. was marginal and they had little or no possibility of affecting the final outcome Only one Private. Foundation attended the Forum The commercial private sector was not invited at all. The study was prepared by Richard Manning former Chair of the OECD DAC Opinions expressed in this. paper are those of the author and do not necessarily reflect the official views of the United Nations. 5 The number and weight of countries and organisations active in international. development is increasing very substantially Official donors not members of DAC Foundations. and private sector philanthropy and new multilateral funds especially of a global thematic. nature are all assuming greater significance There is therefore a strong logic to building a. wider and more structured consensus around aid effectiveness covering all the key. stakeholders The coincidence of three major international events in 2008 the Development. Cooperation Forum 30 June 1 July the High Level Forum on Aid Effectiveness in Accra 2 4. September and the UN Financing for Development Conference in Doha 29 November 2. December provide a window of opportunity to advance this agenda decisively This will. require among other things a clearer demonstration that aid effectiveness is important for. achieving sustainable development which is necessary if the agenda is to receive strong support. at the political level,6 This paper is structured as follows.
Section 2 considers briefly the strengths and weaknesses of the aid effectiveness model. set out in the Paris Declaration, Section 3 considers issues of substance that might be developed further in a. strengthened international framework for aid effectiveness. Section 4 considers how to improve the clarity and monitorability of the indicators. already established in the Paris Declaration, Section 5 considers issues of monitoring and mutual accountability. Section 6 considers the issue of coverage of any strengthened international framework. for aid effectiveness, Section 7 addresses the link between aid effectiveness and development effectiveness. and how to build stronger support at the political level. Section 8 proposes priorities for the DCF in the short and medium term. Section 9 puts forward recommendations for how the various key institutions might. work together in support of this agenda, 2 Strengths and weaknesses of the Paris Declaration aid effectiveness. 7 The Paris Declaration has clearly had much wider resonance than previous attempts to set. out an agenda for making aid more effective including notably the High Level Forum in Rome in. 2003 This may be explained at least in part by some basic structural aspects of the Declaration. in particular, A few core principles Ownership Alignment Harmonisation Management for Results.
Mutual Accountability, A limited number 12 of monitorable indicators with targets for achievement in the. medium term 2010,A process for monitoring at country level. A strong focus even if not yet adequately realised on mutual accountability. 8 A first conclusion might be that these four aspects should remain central to any. strengthened framework for aid effectiveness Against these strengths three weaknesses are. 9 First there are areas where the framework established in the Paris Declaration could be. improved and strengthened many of which will be the subject of discussions in the preparation. of the Accra High Level Forum in September 2008 These include notably. Broadening of the subjects covered whether or not this is done within the five. principles or by adding to their number possibly adding some additional indicators. Improving the clarity monitorability and comprehensiveness of the indicators already. established in the Paris Declaration in order to ensure that all the aspects treated as. principles in the Paris Declaration are adequately covered as well as broadening them. to cover additional relevant subjects, Strengthening the transparency and inclusiveness of monitoring and more broadly of. mutual accountability which is among the least developed of the Principles but. arguably among the most important in galvanising change given the asymmetry in. power between donors and recipients 2, 10 Second as noted in the Introduction the process that developed the Paris Declaration did. not engage the full range of stakeholders While this may have facilitated agreement it means. that the Declaration does not have the legitimacy of a more conventional international process. It is clear that most DAC members and multilateral agencies have taken the process seriously. producing Action Plans and measuring their performance against the indicators and that many. recipient countries have used the Declaration locally to good effect But it is less clear how far. These issues are addressed in the following Sections 3 5. the main elements of the Declaration can or should be applied to international cooperation. activities beyond those of the long established multilateral agencies and of bilateral donors who. are members of DAC 3, 11 Third there are concerns that the aid effectiveness agenda established in Paris may.
become overloaded with procedures which themselves impose transaction costs but may not. have a strong focus on sustainable development results If so it risks being seen as a. bureaucratic topic of interest only to a limited circle of initiates who promote a harmonisation. and alignment industry that has little connection to the real world In fact Aid Effectiveness is a. political issue in that most of the barriers to progress are political and that political support for. aid is unlikely if it is seen as ineffective In this connection it is important to recognise and then. deal with the factors on both sides of the aid relationship that can work against more effective. aid delivery4 and put in place incentives that support it There is a need to demonstrate to. political actors at top level clear links between the issue of aid effectiveness and the broader. issue of development effectiveness real results for real people in order to persuade politicians. in both donor and recipient countries that it is their interests to change the business of aid in. order to ensure sustainable development results 5, 3 Issues in a strengthened international framework for aid effectiveness. 12 In terms of principles the five on which the Paris Declaration is built Ownership. Alignment Harmonisation Managing for Development Results and Mutual. Accountability appear to have commanded a wide measure of support though CSOs rightly. stress that country ownership is not the same thing as arbitrary government action but needs to. be built on participation The DCF could consider whether the five principles are an adequate. way of capturing the key high level elements that are fundamental to more effective aid For. example civil society organisations have proposed that the centrality of human rights gender. equality social justice and environment should be given the status of an additional principle. 13 As for substantive issues there are several key areas either touched on lightly in the Paris. Declaration or altogether absent which are worth considering for more explicit inclusion in a. strengthened framework for aid effectiveness They include four areas about the terms on. which aid is provided predictability conditionality allocation and concessionality and one. This issue is considered further in Section 6, For example on the donor side considerations of political or commercial advantage on the recipient. side the competing interests of line Ministries and those whose function it is to look at priorities across. These considerations are addressed further in Section 7. issue about the responsiveness of aid financing to important development themes of a central. or cross cutting character These are assessed below with some suggestions on the way in. which they might be integrated into a strengthened framework for aid effectiveness. 14 Predictability is indeed covered briefly in the Paris Declaration itself where donors. commit to provide reliable indicative commitments of aid over a multi year framework and. disburse aid in a timely and predictable fashion according to agreed schedules but the. indicator tracks only in year predictability and not even that very effectively Predictability is. crucial to aid effectiveness For aid dependent countries it is of the highest importance to have. some credible assurances about medium term predictability typically over the sort of period. 4 5 years that such countries are often required by donors to show a medium term. development strategy or expenditure framework There is a key underlying issue of mutual trust. here Too often decisions whether or not to disburse aid are subjective and lacking in. transparency Longer term commitments by donors would encourage behaviour change on both. sides of the aid relationship, 15 In order to advance the debate on predictability it needs to be recognised that on neither. side donor or recipient is there such a thing as absolute predictability On either side. governments may change and new governments may have different priorities and mandates. which have to be accommodated Nor is absolute predictability even desirable if it equates to. inflexibility as argued below flexibility is very important where aid dependent countries are. exposed to shocks, 16 Lack of predictability at the project level translates into negative effects on the real. economy eg power shortages and on achievement of the MDGs A systematic measuring at. country level of actual project disbursements against planned disbursements across all donors. would focus attention on this issue and could be used to highlight systemic issues that delay. timely project completion, 17 Lack of predictability in the matter of recurrent transfers whether of cash as with general.
and sector budget support or of commodities such as food or essential drugs raises even more. acute issues These are particularly troublesome when the amounts being supplied by the. donor s are significant in relation to local budgetary aggregates There is a good case for a more. explicit set of mutual commitments in relation to such transfers Good practice would suggest. A commitment by donors providing such recurrent transfers that at least matches in. length the commitments being sought from recipients e g for medium term. expenditure frameworks, Specific measures to guarantee in year predictability of recurrent transfers e g by. payments early in the recipient s financial year in order to tackle the extremely. disruptive effect of in year changes, Adequate measures to ensure predictability of recurrent transfers over the whole. period covered e g by specific tranching arrangements greater clarity about. benchmarks etc, Tackling unnecessary conditionality see below and procedural barriers to prompt. disbursement, Built in flexibility for reprogramming funds and or contingency allowances for additional. transfers in the event of defined external events e g a commodity price shock The. recent French institution of contra cyclic loans with provision of payment holidays. triggered by external shocks is an interesting example of one way to approach this for. donors which provide loans though loan repayments may be modest for those. countries mainly supported by grant financing where it is the availability of. supplementary grant financing that is the issue, 18 These elements could form the basis of an agreed statement of good practice in this area.
19 Conditionality was recognised as an issue at the Rome High Level Forum in 2003 where. donors committed themselves to work to reduce donor missions reviews and reporting. streamline conditionality and simplify and harmonise documentation emphasis added. However no specific workstream was put in place on this commitment and the issue was. addressed only modestly in the Paris Declaration for example by a commitment by donors to. draw conditions wherever possible from the recipient country s national development. strategy and to link funding to a single framework of conditions and or a manageable set of. indicators derived from the national development strategy Importantly no indicator was set. up to measure change despite last minute attempts by NGOs to press for one. 20 Like predictability conditionality is an issue that needs careful analysis Some conditions. are uncontroversial For example all providers of loans specify terms of repayment At project. level it is normal to specify what resources the recipient agency will make available Design. standards need to be set Other aspects of conditionality at project level eg the scale of. measures to mitigate impact on the environment or on people affected by the project pricing. policy can be sensitive and raise controversy This is all the more so at sectoral or at national. level where issues of wide scope such as privatisation or fiscal policy may be at stake Some. procedural conditions e g creation of counterpart funds may appear unthreatening but can be. major obstacles in practice to prompt disbursement Harmonisation of conditions can in theory. minimise inconsistent application of conditions but the price may be high in terms of. complexity each donor adding its own special interests and lead to an all or nothing situation. in which a cutting off of large amounts of aid may become a serious risk In practice some. donors give more weight to procedural conditions prior actions and the like and others to. results based conditions, 21 Overall there are three frequently asserted critiques of policy based conditionality in. particular, That such conditionality is intrusive and unduly restricts policy space It may cut across. for example human rights obligations or serve to advance foreign policy interests of. That conditions are unnecessarily numerous and detailed adding to transaction costs. That conditionality is often ineffective, 22 The IMF IBRD Development Committee in September 2005 endorsed a set of good. practice principles for policy based lending by the World Bank which is one key player in the. international discussion around conditionality In essence these principles were. Ownership Reinforce country ownership, Harmonization Agree up front with the government and other financial partners on a. coordinated accountability framework, Customization Customize the accountability framework and modalities of Bank support.
to country circumstances, Criticality Choose only actions critical for achieving results as conditions for. disbursement, Transparency and predictability Conduct transparent progress reviews conducive to. predictable and performance based financial support. 23 A recent review of progress against these principles by the Bank showed that the average. number of conditions per policy based operation had declined from above 30 in the mid 1990s. to about 10 12 in FY05 and subsequently and that the average number of benchmarks actions. and indicators describing a government s program that are not conditionality in policy based. operations funded by IDA had declined sharply by 40 percent from FY2006 to FY2007. though this followed an earlier rise and the number of benchmarks had risen for IBRD. borrowers Significantly the Bank reported that it had proved difficult to limit the size of the. policy matrix in the early stages of donor harmonization efforts underlining the problem. referred to above and putting into question the practical effect of the Paris Declaration. commitment to a common streamlined framework Finally a strong message from the Bank s. consultations was that involving local counterparts more in planning and executing analytic. work and in building and reinforcing local capacity for policy formulation and analysis should be. an essential element of the Bank s support 6, 24 There is thus a significant degree of agreement that streamlining of conditionality is. important indeed some Civil Society organisations have called for the complete abolition of. policy conditions but also much evidence that day by day incentives continue to encourage too. many and too intrusive conditions There would seem to be a strong case for developing some. sort of International Code of Good Practice around conditionality not limited to policy based. operations or as proposed in the first draft of the Accra Agenda for Action merely to. transparency and with at least some clear indicators against which movement towards greater. streamlining can be tracked if a specific target aimed at making conditions more parsimonious. and less intrusive is thought too difficult Such a code for which the Development Committee. decision of 2005 contains many useful elements could usefully distinguish between. conditionality of a procedural and of a policy nature as well as assess the pros and cons of. conditionality linked to actions within the control of governments as opposed to results not fully. within government control Meanwhile all donors should observe existing good practice on. criticality in particular, 25 Finally as emphasized at the regional workshop held in Kigali at the end of April to prepare. for the High Level Forum in Accra there would be much to be said for moving away from the. whole language of conditionality which carries extremely negative and disempowering. connotations in many countries and among many groups in favour of talking about mutually. agreed targets benchmarks or policies This should of course not be merely a linguistic shift but. a real one which recognises more explicitly that donor imposed criteria are unlikely to deliver. results and that genuine local commitment is the key to progress. 26 Aid allocation was not discussed at all at the Paris High Level Forum but is the subject of. another paper in this series There are two main aspects allocation between countries and. allocation within countries,27 The 2007 OECD Development Cooperation Report.
www SourceOECD org developmentreport shows some interesting trends in inter country aid. allocation including an increase in programmable aid to LDCs and other Low Income Countries. and to Sub Saharan Africa between 2002 and 2006 counterbalanced by sharp falls in ODA to. some large middle income countries and India Is this evolution likely in principle to improve the. effectiveness of a given volume of aid in helping recipient countries to address internationally. agreed development goals including the Millennium Development Goals. The findings of the November 2007 Progress Report were contested by Eurodad research on WB. conditionality www eurodad org whatsnew reports aspx id 1804. 28 If one takes a static view and relates ODA levels to numbers of poor people in each. recipient country it is not obvious that the move away from large lower middle income. countries and India where absolute numbers of very poor people are large will tend to lead to. faster progress against the MDGs But if one takes a more dynamic view7 it is likely that the. depth and stubbornness of poverty will be larger in the poorer and least developed countries. justifying a higher level of expenditure per head of each poor person than in middle income. countries This is in essence the logic that lay behind recognising the least developed countries. as a separate category To that extent the recent trends are moderately encouraging. 29 A second inter country issue is the weight to be given to good performance and results. as opposed to need and vulnerability a topic on which much ink has been spilled over the. years Different parts of the international system give different weight to these criteria The. International Financial Institutions for example usually give more weight to the former though. IDA and AfDF have also policies that favour fragile situations and the humanitarian agencies. necessarily to the latter Few bilateral donors use quantified models to help determine aid. allocation though elements of both performance and need are usually taken into account along. with political historical and commercial considerations Global Funds have their own models. sometimes targeted at countries with specific problems others essentially depending on. requests received Recipient countries have justifiable concerns about the multiple and often. non transparent approaches used by donors to assess performance both at sector level and. more broadly, 30 What is the net result of these very varied approaches DAC figures show that IDA eligible. countries in the two top quintiles of performance as measured by the World Bank have received. a stable or possibly declining share of ODA over the last few years it is not clear that reforms. quickly translate into additional aid flows Among countries in fragile situations the amount of. ODA per head varies very considerably according to the profile of the country concerned and. the perceived scope for effective assistance And there appear to be countries which receive. significantly more or less than models would predict leading to concern over donor darlings. and orphans, 31 Another strand of concern is that some countries are or may become unhealthily. dependent on aid leading either to problems of macroeconomic management Dutch. Disease or to a dependence mentality Various parameters are used to illustrate when. dependence may become a real problem e g over 40 of the budget over 20 of GNI Over. time in fact aid dependence for most low income countries is stable or declining as economies. See the article by Professor Adrian Wood entitled Looking ahead optimally in allocating aid World. Development 2008 forthcoming already available as Queen Elizabeth House Working Paper 137. grow but there is a range of small countries mostly either islands or small least developed. countries where the issue is real and where enhancement of domestic revenue is therefore a. particularly high priority, 32 There is in addition a reasonable concern that because the country is the most prominent. unit for allocation regional issues and investments of a regional character may be marginalised. by too narrow criteria for aid allocation It is certainly important that investments of regional. significance are not left unfinanced because they may be given low weight by individual. countries e g a road to a landlocked neighbour, 33 Intra country aid allocation is also a significant issue A brief survey of trends in aid by. sector in recent years shows a sharp increase in aid for the health sector with a particular. emphasis on HIV AIDS and a moderate increase in aid for basic education This is balanced by. sharp declines in aid for the productive sector including notably agriculture and until the last. few years also in infrastructure There is some increase in programme type funding such as. budget support though this is still far below the levels of twenty years ago and a huge increase. in debt write off only a small part of which reduces annual debt service outgoings On a narrow. view of the MDGs the increase in health and education spending is very welcome but given the. links between poverty and all the MDGs the decline in areas such as agriculture a prime source. of gainful employment for poor people and infrastructure with its strong links to growth and. accessibility are matters of concern, 34 Broadly speaking achievement of most if not all of the Goals will require effort not just in.
the specific sector which a Goal may relate to most closely but also in other areas eg better. levels of education better environmental conditions and ease of access to health facilities all. contribute to better health yet none of them involves health sector spending They will also. require attention to geographic balance within the country All countries need balanced. development in both the sectoral and geographical sense. 35 The logic of the principles of ownership and alignment is that donors should be more. responsive to actual demand from recipient countries and less driven by their own notions of. what these countries need This argues against setting targets for aid spending by sector. which are to apply to all countries or even all countries of similar economic status or of the same. region Nevertheless such targets are often in fact set by international gatherings with a focus. on particular areas, 36 A strengthened framework for aid effectiveness could usefully attempt to set out good. practice in inter country and or intra country allocation of aid However this would be no light. task it is indicative of the sensitivity of the issue that very few international agreements the. target for least developed countries being the most prominent exception exist in this area In. any event a regular report on the evolution of inter country and intra country aid flows would. be a valuable basic input to future meetings of the DCF. 37 Finally under the heading of terms of aid is the issue of concessionality Most ODA is. provided in grant form and most debt crises have been triggered by lending which is not ODA. principally private bank lending non concessional lending by the International Financial. Institutions and export credits This suggests that the most significant issues lie not so much in. the terms of ODA as in non concessional or very low concessional loans to countries whose. foreign exchange earnings are very modest and uncertain. 38 The write off of large amounts of bilateral and multilateral debt over the past few years. has created a new situation in which many very poor countries are for the first time in many. years carrying very modest levels of external debt though internal debt remains a problem for. many This opens up space for them to resume foreign borrowing but clearly this needs to be. done in ways that will not simply return them to debt distress. 39 This will require prudence on both sides in the way the country accesses and uses loan. finance and in the way that lenders both private and official provide such finance It does not. mean that borrowing on appropriate terms and for appropriate purposes may not be a. perfectly sensible part of a financing strategy Indeed some academic studies have concluded. that loans are often associated with better results than are grants perhaps because the. recipient is more committed to a project that it is going to repay On the official side. International Financial Institutions have become more cautious about lending through their hard. windows to poor countries and the OECD has promulgated guidance to providers of export. credits which is also designed to discourage unduly aggressive provision of credits It is highly. desirable that all lenders official and private observe similar restraint when considering lending. to poor countries with uncertain export earnings, 40 It might be worth incorporating some of these considerations in a strengthened. framework for aid effectiveness for example by securing agreement that all official or officially. backed loans to Least Developed Countries and other low income countries excluding those. countries sufficiently creditworthy to receive hard lending from the World Bank such as India. should be on terms recognised by the IMF as concessional see below or at least that non. concessional official lending should remain within the limits prescribed by the Debt. Sustainability Framework Ensuring responsible terms for development finance 8 requires. action by both lenders and borrowers9 However there also needs to be recognition of the case. for accessing loan finance where it is both additional and directed to investments with a strong. linkage to economic growth and can be serviced with a proper margin of prudence consistent. with debt sustainability,See www eurodad org whatsnew reports aspx id 2060. 41 This leads on however to one aspect of ODA accounting that remains problematic The. OECD Development Assistance Committee while requiring all forms of ODA to be concessional. in character has continued to use a standard of a 25 Grant Element calculated at a 10. discount rate originally set in the 1970s to assess concessionality In contrast the IMF when. determining ceilings for non concessional borrowing considers as non concessional all lending. below a Grant Element of 35 calculated at the usually much lower cost of capital in the. currency of the loan technically the Commercial Interest Reference Rate CIRR used by the. OECD Export Credit Group to assess certain parameters This is a significant difference At. present day interest rates in most international currencies a 25 Grant Element calculated at a. 10 discount rate can be achieved by non concessional market borrowing and it is therefore no. longer an adequate guarantee of real concessionality. 42 As part of a strengthened framework for aid effectiveness it would be highly desirable to. align DAC practice with that of the IMF or to find some other way of ensuring that all loans. counting as ODA do indeed have a significant element of concessionality This could be linked to. a statement by all official lenders both concessional and non concessional which recognises. the need to respect the need of borrowers for debt sustainability OECD Export Credit Group. commitments to responsible lending are a start in this direction. 43 There has been much discussion of how far the aid effectiveness framework as set out in. the Paris Declaration is sufficiently responsive to important development issues that are central. to sustainable development and which have implications across all sectors notably human. rights gender and environment There is a brief section of the Paris Declaration that calls for a. harmonised approach to environmental assessments and refers to the need for similar. harmonisation efforts on other cross cutting issues such as gender equality and other thematic. issues But this falls well short of a coherent statement of resolve At the same time concerns. have been raised that if more programmatic forms of aid such as budget support increase at. the expense of project type interventions some of these issues may be increasingly. marginalised, 44 Given the importance of these issues it would seem opportune to consider developing a. more thoroughgoing statement of good practice This might for example include recognition of. the importance of, Good country level systems for consultation and for domestic accountability.
Strong civil society in all its dimensions and an effective voice for those who may too. easily be marginalised such as women the disabled minorities etc. Willingness to work across traditional divides between State and non State institutions. Stronger local institutions of research and evaluation in support of evidence based. 45 A strengthened framework for aid effectiveness could recognise these dimensions more. explicitly and call on donors to support them The MDGs do already pay attention to some of. these issues but the measurement eg of gender and environment progress under the MDGs is. far from adequate To develop agreed indicators of progress eg inclusion of gender analysis in. sector programmes is an important task in all three of these areas Developing countries need. to improve their systems for monitoring and evaluating progress in these areas and donors. should both assist the process and use these systems for their own monitoring. 4 Improving clarity and monitorability of indicators in the Paris. Declaration, 46 The Baseline Survey under the Paris Declaration demonstrated practical definitional. problems in several indicators such as Coordinated Capacity building Indicator 4 Project. Implementation Units Indicator 6 and Programme based approaches indicator 9 The. measurement of aid on budget and its predictability also raise issues Attempts have been. made to address some of these problems in the monitoring round conducted in the early. months of 2008 for example by strengthening the role of the country coordinators and by giving. more examples of approaches that illustrate the various parameters It remains to be seen how. successful these attempts will prove in practice, 47 It is doubtful whether the 2008 DCF should spend time on these often quite technical. issues but if the report on the monitoring round is available it may wish to note whatever the. report has to say about remaining definitional challenges and urge that these be addressed. through the continuing process in the DAC hosted Working Party on Aid Effectiveness It might. be desirable to call for a report back to the DCF in 2010 An example of the possible direction of. travel would be to make the indicator on co ordinated capacity building more robust by. emphasising alignment of technical cooperation to capacity development plans as the basis for. harmonisation by requiring clearer evidence of demand and by measuring the extent of the. use of locally hired expertise This could develop into an international code of conduct on. delivering TC rather than as additional targets under the Paris Declaration. 48 In addition one issue stands out as inadequately covered by the indicators untying. where the target is merely continued progress over time There is a long history of concern. that the tying of aid to procurement in the donor country or sometimes just in the donor. country and the recipient leads to excess costs and therefore to lower value for money from. the aid expenditure The issue has been debated among the main donors in the OECD. Development Assistance Committee for nearly 40 years with the only agreed result of any.

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