Making Progress in the Use of Country Systems at Country-Level

Using country systems for the delivery of development assistance has the potential pay-off of increased investments and strengthening of public financial management and related procedures. It is also argued that using country systems leads to greater overall impact, improved co-ordination, and increased predictability and sustainability of donor programmes. It can also lower transaction costs. Likewise, damage can be done to country systems when development partners manage their assistance through parallel channels.

One of the principles of the Paris Declaration (2005) was that development partners would align to the policies of the partner countries and in doing so would make use of the country systems. The Accra Action Agenda (2008) commits to “more use of country systems for aid delivery”. The Busan Partnership Agreement (2011) committed development partners to increase the use of country systems as the default position, alongside the strengthening of financial management and related systems.

The work of the Collaborative Africa Budget Reform Initiative (CABRI) on use of country systems is focused on ways that development partners can shift towards the full or partial reliance on country systems to allocate resources, disburse funds, procure goods and services, and account and report. And at the same time, recognize the fiduciary risks of using such systems.

A CABRI study in 2014 found that most development partners place more emphasis on short-term fiduciary and performance risks than on long-term developmental risks. Development partners who use country systems forfeit some degree of control over their development assistance, which can be perceived to increase the risks of activities not being implemented, or of funds not being used as intended. As a result, development partners tend to mitigate risks by not using the country systems, especially where the diagnostic assessment is not favourable, instead of managing the risks in favour of longer-term development objectives.

In our collaboration with African governments, officials acknowledge weaknesses in their systems and capability gaps. And by doing so, also provide the evidence of where systems are strong and should be used for the delivery of aid, but are not. Apart from cases of un-earmarked sector budget support and general budget support, the least used systems are those for planning and budget preparation. There is some evidence that audit systems are the first to be used by development partners that traditionally use their own systems. Similarly, the CABRI study shows that when development partners use the budget execution, accounting and reporting systems of the partner country, audit safeguard measures are often in place.

As the dialogue between development partners and partner countries improve, and trust is built alongside the improvement in country systems, development partners ‘grow into’ the use of country systems. Across the cases reviewed in the CABRI study, there is evidence of a graduation from pooled funding mechanisms managed outside of the government to government-managed pooled funds, and to budget support arrangements.

Case Study Review: Country Context and Ownership in Multi-Stakeholder Initiatives

The 2008 Accra Agenda for Action first brought attention to the importance of inclusive partnerships for development. Acknowledgement of the centrality of the principle of ownership dates back to the 2005 Paris Declaration. Both inclusive partnerships and country ownership are core principles of effective development cooperation endorsed by the Global Partnership today and are central to the 2030 Agenda for Sustainable Development.

The 2030 Agenda recognizes ownership as a key ingredient for sustainable development and regards multi-stakeholder partnerships as an important means of implementation. But what does it look like in practice when inclusive multi-stakeholder initiatives (MSIs) take account of the principle of (country) ownership? The Comparative Studies of Multi-stakeholder Initiatives (hereafter: study) looked at this question within four country contexts (Costa Rica, Indonesia, Kenya and Kyrgyzstan) and recently presented its findings to the Task Team on CSO Development Effectiveness and Enabling Environment.

The study explored how particular country and partnership conditions can affect – either positively or negatively – the effectiveness of MSIs. Drawing from seventeen cases, the study identified the concept of ‘democratic disruption’ as one pertinent country condition. Countries have varying democratic political systems in which power is distributed differently across major institutions of the state and society.

These systems and power relations are not static. By way of example, where state officials are involved in an MSI, the study noted that elections can bring about smaller or larger shifts in the individuals involved and the approaches used. This can create new opportunities for progress. Effective leadership in an MSI must be able to anticipate, be prepared for, and be able to take advantage of disruptions that democratic processes bring.

The study identifies the importance of multi-level governance as an influential country condition in three of the four countries. Local ownership here is key. In a highly decentralized environment, political commitment on the part of local governmental actors – who have authority to define priorities, develop local regulations and allocate resources – was often essential to achieving the objectives of an MSI. The study therefore recommended the creation of designated spaces ‘at the table’ for local actors, be they government, civil society or the private sector.

The skills that an individual brings to an MSI, not just an organizational engagement, were also seen to be a key condition for an effective MSI. Though organizations come together around a shared interest in an MSI, the right people need to be at the table. In several cases, MSIs greatly benefited from the skills, competencies and reputation of particular individuals (‘champions’). In fact, the study found that individuals can be more significant for MSI effectiveness than formal designs and ‘ideal’ models of collaboration. Amongst the particularly useful skills are soft skills, such as stakeholder sensitivity and adjustment to context.

The concept of ownership naturally raises the question of ownership by whom? When it comes to MSIs, one of the aims is to extend ownership for an initiative beyond government. So what does this mean for MSIs? With governments frequently playing a leading role – primus inter pares (first among equals) – broader ownership translates into a need for collective governance of an MSI. MSI governance requires a deliberate and sensitive approach to equitable collaboration. Non-state stakeholders should not be seen as mere supporters of state efforts, but as equal partners that are essential to a genuine collaboration in which each actor brings unique contributions to the MSI.

A distinctive feature of this study is that it also examined the role of what the researchers termed the ‘interlocutor’ for an MSI. The interlocutor can be best defined as the entity that hosts, facilitates, leads or acts as a secretariat for an MSI. The study looked at the different roles of the interlocutor in country-owned MSIs. The findings in relation to the multilateral Scaling Up Nutrition (SUN) Initiative – which was used in the study as a comparative internationally-inspired MSI – were particularly interesting at the country level. With an international Secretariat based in Geneva, the SUN Initiative is implemented nationally in a multi-stakeholder fashion.

So what did the study discover about the role of the interlocutor in this nationally-implemented SUN Initiative? An interesting finding from the perspective of ownership is that in some cases there was a need for prescription. By way of example, actors engaged in an MSI may need guidance on how to initiate a multi-stakeholder process or welcome a constructive critical assessment of their performance.

In the case of SUN, it was noted that respect for ownership should not be seen as excluding a mutual discussion on the quality of the initiative at a country level. Such discussions should not be part of top-down prescriptions, but rather take the form of peer-to-peer learning. Though evidently it is important to avoid top-down prescriptions, this finding suggests that ownership and external guidance are not mutually exclusive. In some cases, a balance needs to be found between ownership with country-level multi-stakeholder steering on the one hand, and a certain level of guidance, sensitive to the importance of country realities, from the interlocutor (in this case an international secretariat) on the other hand. This finding suggests that the interlocutor can play an important role in helping provide direction.

To summarize, when it comes creating ownership in MSIs for the purpose of effectiveness, the study offered the following recommendations: 1) Be prepared for and able to take advantage of democratic disruptions; 2) Create designated spaces at the table for local actors; 3) Have the right organizations and the right individuals at the table; 4) Use a deliberate and sensitive approach to equitable collaboration, and 5) Do not preclude external guidance.

What becomes clear from the study is that there is no one-size-fits all template for undertaking an effective MSI. While from the different MSIs one can identify important conditions for success, ultimately the design of an MSI needs to be tailored to its particular (country) context. This is a challenge development stakeholders will need to face and address as they promote and create various MSIs in support of implementing the SDGs.

Want to know more? You can access the Comparative Studies of Multi-stakeholder Initiatives via the Task Team on CSO Development Effectiveness and Enabling Environment website. Stay tuned for further Task Team blogs on this subject.

* The Comparative Studies of Multi-stakeholder Initiatives were commissioned by the Task Team on CSO Development Effectiveness and Enabling Environment and executed by Prof. Alan Fowler and Dr. Kees Biekart of the International Institute of Social Studies of Erasmus University Rotterdam.

About the Author:

TaskTeam-logo-01The Task Team on CSO Development Effectiveness and Enabling Environment is a multi-stakeholder body that seeks to advance the role of civil society in development. Its participants come from three stakeholder groups: governments that provide development cooperation, recipient governments and civil society organizations (CSOs) affiliated with the CSO Partnership for Development Effectiveness (CPDE).

A ‘Step Change’ for Development Co-operation in Laos?

We may well be about to see a far more inclusive way of working together for development in Laos.

After six months of consultations with donors, civil society organizations and businesses, the government has finalized a declaration that will guide development cooperation in the country until 2025.

The government and around 30-40 partner countries will sign the Vientiane Declaration on Partnership for Effective Development Cooperation on Nov. 27, during the country’s main national development forum.

Laos has racked up some commendable successes: gross domestic product has grown by an average of 7 percent year-on-year over the past decade; poverty was halved by 2015 — in line with the Millennium Development Goals; and hunger is down and people are living longer, healthier lives.

Yet the country faces serious challenges: An estimated 44 percent of children under 5 are stunted, and 27 percent are severely underweight. Despite a significant reduction, the number of maternal deaths remains high. Inequality is on the rise, and there are significant challenges surrounding environmental sustainability and ridding the country of unexploded ordnance that still kills, maims and presents an impediment to development.

Assistance from all sources — and in all forms — remains vital for Laos to tackle these challenges, and to meet its main aim of graduating from least developed country status by 2020.

In this context the Vientiane partnership declaration is a crucial tool to ensure all assistance is coordinated, in line with national development plans, and deployed in the smartest possible way for the maximum possible impact.

In line with global principles of effective development cooperation, the declaration highlights that official development assistance, or traditional aid, must be used wisely to accelerate broader, systemic change. This means that all development cooperation should be nationally owned and aligned with country’s development priorities in ways that link economic, human and environmental benefits simultaneously.

Efforts to achieve this could include more support to decision makers in key ministries on management and leadership. It could also include more regular policy dialogue to share ideas on what works best, as well as further engagement with local communities to help them raise questions about the services they need.

The declaration also places a strong emphasis on boosting domestic revenues, increasing cooperation with other developing countries and regional partners, upping knowledge and technology transfer, and closer work with business and civil society.

It includes clear, concrete commitments to boost local development planning, fight corruption, build an inclusive financial sector and build on knowledge sharing networks, which could include a mechanism to bring about the development, transfer and dissemination of clean and environmentally sound technologies.

Around 30 to 40 OECD member countries and developing countries are set to sign up, alongside a range of international organizations. Signatories should work together on a fully resourced implementation plan by September 2016.

The partnership declaration is a solid, effective framework to bring about the maximum impact from all development support in Laos for the next 10 years. If inclusive partnerships are built and kept for the long term, it could just mark a “step change” in development cooperation for the country.

Cross-posted with Devex

AuthorAbout the Author

Kaarina Immonen is the U.N. resident coordinator and UNDP representative in Laos. She began her career in the United Nations in 1990. Her most recent appointment before her arrival to Laos was as deputy special representative of the secretary-general for the U.N. Integrated Peacebuilding Office in the Central African Republic, a post she held from December 2012 to early 2014. She also served as U.N. resident coordinator and humanitarian coordinator during her time in the Central African Republic. She has also worked in Moldova, Russian Federation, Georgia, Cambodia and Vietnam.