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Roundtable Topic 2: Alignment This page comprises information on background resources for Roundtable 2, compiled by the United Nations Development Programme. It does not necesserily represent the views of the Third High Level Forum organizers. To access detailed information on the background resources for Use of country systems listed below, please visit the UNDP Aid Effectiveness Portal.
Background Resources: Use of country systems
OECD DAC, “2006 Survey on monitoring the Paris Declaration: Overview of the results”, 2007
The baseline survey found that, on average, 40% of aid flows use country systems for PFM and 39% for procurement. Targets have been set on a sliding scale, based on the assessed quality of country systems under DAC methodology. Importantly, however, the survey results showed now clear relationship between the quality of country systems and the extent to which they were being used by donors, suggesting that donors rules and procedures remain the primary determining factor. Marcus Cox, Samuel Wangwe, Hisaaki Mitsui and Tran Thi Hanh, “Independent Monitoring Report on implementation of the Hanoi Core Statement”, Hanoi, November 2007
The independent monitoring study in Vietnam found that what progress there has been on use of country system was almost entirely limited to budget support and other PBAs. There has been little change in the delivery of traditional investment projects. It found there were three distinct groups of donors in their approach to use of country systems: (i) the development banks take a limited reading of the Paris commitment, recognising an obligation to use country system only as and when they reach international standards; until then they are bound by strict rules preventing them compromising on fiduciary standards; (ii) a group of bilateral donors with more permissive rules, enabling them to balance the greater development impact and sustainability of using country systems against the fiduciary risks; and (iii) a significant number of donors (around half of the total) still bound by very restrictive rules, enabling them to use country systems only in very limited conditions. However, the report also found that donors were receiving relatively little encouragement from their government counterparts to use country systems, and that traditional aid practices created vested interests that were difficult to overcome. Public Expenditure and Financial Accountability (PEFA)
PEFA is the product of a joint initiative of a number of donors to strengthen assessment of PFM, procurement and financial accountability systems. Its Performance Measurement Framework is designed to provide a harmonised, country-led tool for measuring improvements in PFM systems over time. Guidance on applying it can be found on the website. World Bank, “Public Expenditure Management Handbook”, 1998
The World Bank produced this handbook in 1998, providing guidelines on how to strengthen budget processes, how to link and budgeting through an MTEF, and how to development effective public financial management information systems. It provides checklists of good practices in areas such as public audit and aid management. World Bank PFM Reform Database
This database contains a wide selection of current reference material on PFM reform, covering budget preparation, budget execution, accounting and financial reporting, external oversight and cross-cutting issues. Examples are drawn from both OECD and developing countries. It also contains the newsletter FM Notes, which documents recent experience with PFM reform programmes. ODI Briefing Paper, “Linking policies and budgets: implementing medium term expenditure frameworks in a PRSP context”, June 2005
This paper summarises the results of an ODI research project on the experiences of developing countries in linking PRSPs to the budget through MTEFs. It found that introducing MTEFs had been a good catalyst for PFM reforms, even from a low base. A key successor factor was the setting of a clear budget timetable, integrating the various phases of the budget cycle with other planning processes. However, it also points to the need to manage expectations about how much time it takes to provide effective linkages between the PRSP process and resource allocation. The individual case studies can be found on the ODI Aid and Public Expenditure website.
OECD DAC Joint Venture for Procurement
In December 2004, Joint Venture members approved the Johannesburg Declaration, which recognised the importance of strengthening procurement to increase the effectiveness of development spending. The signatories undertook to develop new capacity building techniques and approaches, based on country ownership, to develop a common set of diagnostic tools and to focus on achieving measurable improvements in procurement systems. Since then, the Joint Venture has developed a set of good practice guidelines: Strengthening Procurement Capacities in Developing Countries, 2005. It represents a departure from previous approaches through its emphasis on the process of change, as much as the substantive content of procurement reforms. The Joint has also developed a New Common Benchmarking and Assessment Methodology for Public Procurement Systems, which has been applied in 22 pilot countries. The Joint Venture will be producing guidelines on using this methodology for Accra, as well as a good practices guide on procurement reform.
World Bank on Public Procurement
The World Bank has its own diagnostic tool for country procurement systems: the Country Procurement Assessment Report (CPAR) and guideline for its use. World Trade Organization on Public Procurement
This contains extensive information on public procurement, including the Agreement on Government Procurement signed by many WTO member states and on-going work on transparency.
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