How should donors and developing countries work towards co-ordinating practices to ensure effective delivery of aid? These guidelines drawn up by the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) offer a set of principles and ‘good practices’ for all parties. Their goal is to simplify and harmonise procedures, thereby reducing costs and boosting progress towards the Millennium Development Goals.
Managing different donor procedures bears a high cost for developing countries. Meeting multiple requirements employs a large proportion of their administrative capacity and reduces ownership of their own development plans, among other problems. In response, the DAC convened a task force and commissioned a survey of developing countries’ needs. This work culminated in a set of good practice papers on how donors can improve their operational procedures with a view to strengthening partner country ownership. The papers address six key areas: frameworks for donor co-operation, country analytic work and preparation of projects and programmes, measuring performance in public financial management, reporting and monitoring, financial reporting and auditing, and delegated co-operation.
Each chapter contains detailed guidelines and examples of initiatives that are already under way. The broad areas covered by the recommendations are:
- Good practices between donors and partner governments. This might include greater reliance on partner government systems for administering aid or timing missions, and should be agreed on and applied by all parties.
- Good practices between donor agencies. The aim here is to prevent unnecessary duplication of work: for example, one donor could entrust another to execute tasks such as audits or diagnostic work.
- Good practices within individual donor systems. This covers changes donors can make to their own systems to reduce costs and strengthen partners’ ownership.
- Guidelines to address potential risks arising from harmonised procedures. These emphasise the importance of adapting practices to local circumstances, building capacity and using indicators to monitor progress.
The message for donors is that they should simplify and harmonise their procedures, while attempting to align them in the medium-term with systems in partner countries. Donors should also aim to be more transparent. Suggested improvements include:
- Setting an effective institutional framework with partner governments that should lead to greater sharing of objectives, clearer expectations, lower costs and more predictable and transparent aid flows.
- Rationalising the development and application of diagnostic tools, including country analytic work, and the preparation of specific donor operations.
- Planning and executing diagnostic reviews of public financial management in the context of a government-led strategy for improvement. This should be integrated with performance measurement and capacity building efforts.
- Designing reporting and monitoring systems that avoid duplication and support the priorities of partner countries.
- Working towards the delivery of common financial reports that reflect all project funds, as well as independent audits. Donors should co-ordinate their requirements and align them with strengthened national processes.
- Increasing delegated co-operation, whereby one donor acts on behalf of one or more others. This should benefit all parties and be done in a way that supports partner governments’ leadership of the development process.
