6. Conclusion

Linking Aid Effectiveness and Development Results

This Aid Effectiveness Report set out with the objective of establishing a closer link between aid effectiveness work and efforts to realise improved development results. It is therefore useful to conclude by reflecting on the extent to which this Report has identified the added value of aid effectiveness work, demonstrating the contribution that effective aid management can make to the realisation of national development goals.

First, this Report identified the transmission mechanisms that associate the aid effectiveness agenda with improved development results. These included the contribution to improved policy and planning, as well as directly supporting enhanced service delivery through the improved use of information systems. The need for effective monitoring tools that can assess how inputs in the form of development finance are contributing to national priorities was also identified, as well as the role these monitoring systems can play in promoting lesson learning and improved transparency. The data presentations in this Report not only equip Government with the information that is required to manage aid more effectively, some of the discussion also goes some way to identifying issues related to sector allocations and the selection of aid modalities that may promote the impact of development assistance.

The Report then proceeded to consider the notion of concentration and fragmentation of aid. Empirical cross-country and time-series data was introduced to demonstrate and to emphasise that increased aid effectiveness is a policy imperative rather than a policy option. Further empirical analysis was then used to assess the degree of alignment between development assistance and the NSDP, identifying where relative funding gaps have emerged and where additional funding efforts might be made. An analysis of broad development cooperation trends provided an enhanced understanding of how resources were reallocated over time and how, if capacity development is to be supported in an effective and sustainable manner, there needs to be a much more detailed understanding of how technical cooperation is provided and managed. This part of the Report concluded that it is the manner in which aid is programmed, managed and delivered that most affects its impact, rather than any simplistic analysis based purely on numbers of partners and projects.

The empirical analysis was then nuanced by reflecting on the experience of the Technical Working Groups, identifying practices that might promote or impede the attainment of results at sector level. By complementing this information with data on partnerships, sector and sub-sector financing, and sector-specific aid effectiveness indicators, the nature of the aid coordination challenge at a sector level could be established, together with the basis for an appropriate response. It was found that most line ministries, in partnership with their associated TWGs, have begun to make progress but much remains to be done if aid coordination-related activities are to move beyond the level of the cosmetic towards making a real difference in delivering results and to developing national capacity.

Based on this analysis, four main recommendations were developed within the existing H-A-R Action Plan framework. Each of these recommendations has been complemented by a series of practical actions that are considered to be necessary for making progress in implementing the aid effectiveness agenda and for strengthening the linkage between development assistance and development results. A set of indicators has also been proposed that will jointly monitor progress towards global commitments, as identified in the Paris Declaration, and towards meeting national priorities, as set out in the H-A-R Action Plan. The monitoring system, i.e. the CDC Database supplemented by the TWG reporting mechanism, is in place and fully operational and requires only that development partners provide accurate and timely data.

Moving Forward with Evidence-based Aid Management

This Report therefore has practical utility as, by moving beyond a simple reflection on how development assistance has been used, it has derived some lessons that are grounded in the empirical evidence. The Report has established empirically, for example, that Cambodia's aid coordination challenge is formidable. This means that actions must be identified to promote the necessary efficiencies that are required if development assistance is to maximise its contribution to the NSDP. This will include developing and implementing new approaches, including programme-based approaches and budget support, that also focus on building new capacities, both within Government and development partner agencies. It might also be observed that by highlighting measures that can be taken by both Government and development partners towards these objectives, the Report also contributes to the evolving mutual accountability dialogue.

It is essential that aid effectiveness work continues to be evidence-based, providing a means toward achieving better development results rather than becoming an end in itself. In this way, the aggregate impact of our aid effectiveness work, measured in terms of NSDP outcomes, will be more than the sum of its component parts. In this regard, the monitoring of the H-A-R Action Plan can be a useful innovation, particularly with regard to a possible mid-term review and the next High-Level Forum on Aid Effectiveness that will take place in 2008.

It will be essential, however, that efforts are made to build on the quality of data and to ensure that the use of these information systems is managed efficiently so they support our strategic work rather than become an administrative burden that provides little or no return. The objective must not be to inform a technocratic exercise focused on 'reduced numbers of PIUs' or some other proxy for aid effectiveness. Rather the emphasis should be on supporting each TWG as it identifies the key constraints that must be addressed if the development partnership is to maximise its contribution to the implementation of the NSDP. It is particularly notable, therefore, that the CDC Database has now been customised to support routine monitoring as well as the production of practical and policy-relevant reports.

More fundamentally, it must also be observed that the coordination of development assistance cannot be seen as an exclusively technical exercise. There are many complexities, concerns and interests that inform the scale and scope of development cooperation as well as its modality and consequent impact. The analysis presented here, which is chiefly of a technical nature, must therefore be factored into the wider TWG and GDCC discussion about the role, rationale and desired impact of development assistance.

Actions for Increased Aid Effectiveness

While the transmission mechanisms outlined in Chapter One and recounted above are necessary to realise improved aid effectiveness, they cannot be considered, however, to be sufficient conditions for ensuring the increased impact of aid. The foundation of the aid effectiveness work in Cambodia must be linked to promoting ownership of a more authentic kind, i.e. one that is demonstrably translated into leading the development partnership, delivering results and ensuring that mutual accountability exists in the management of aid. This is why, as the Report moved to the consideration of policy prescriptions, three of the Report's four recommendations are directly related to the strengthening of national ownership.

The October 2006 Declaration on Aid Effectiveness identifies actions that are required by Government and development partners respectively while the Paris Declaration also identifies common actions. To conclude this Report it may therefore be appropriate to revisit this approach and to reaffirm the mutual obligations of both parties to our aid effectiveness work. In the context of the JMIs and the H-A-R Action Plan it is therefore possible to frame the main conclusions of this Aid Effectiveness Report as a mutual commitment to:

  1. Strengthen the Technical Working Groups;

  2. Implement the Strategic Framework for Development Cooperation Management to maximise the strategic potential of CRDB/CDC's mandate in linking aid and development results;

  3. Maximise the impact of technical cooperation by emphasising its capacity development role and ensuring that management arrangements are in place so that technical assistance can be successfully utilised in the new aid environment; and

  4. Promote the use of mutual accountability mechanisms as the foundation of an effective aid partnership.

Based on the significant progress made to date, and the commitment to our partnership that has been demonstrated and regularly reaffirmed by Government and development partners, there is every reason to believe that the recommendations made in this Report can be fully implemented. The manner in which these recommendations have been derived from the evidence also indicates that their successful implementation is likely to reap significant rewards in terms of implementing the NSDP and making progress towards the Cambodia Millennium Development Goals. The final conclusion of this Report must therefore be that the combination of strong evidence-based systems and an enduring commitment to our development partnership will serve us well.

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