Partnerships For Development: A New World Bank Approach

The World Bank has produced a discussion paper, Partnership for Development: Proposed Actions for the World Bank, which presents a strategy for building ownership into the development process, developing partnerships between donors to fund government designed programmes and to make more effective use of aid resources. The main features of the strategy are:

• encouraging government design and ownership of reform programmes;
• building public consensus for reform by organising national conferences on development strategies and involving civil society and the private sector in designing development approaches;
• developing partnerships between donors by improving aid coordination mechanisms;
• selectivity to encourage better aid effectiveness, building on the work of Dollar and Burnside. ¹

The author, Nawal Kamel (known to some NGOs for her role in setting up the HIPC debt initiative) has just embarked on a tour to discuss the paper with interested NGOs, academics etc. There will soon be meetings in Vietnam and Cote D’Ivoire, and perhaps other places. Interested groups should be able to obtain the paper from their local World Bank office or from the Bank in Washington ( nkamel@worldbank.org).

The deadline for comments is the end of August, after which the report will be revised and returned to the Board for discussion in mid-September before the annual meetings. Following is a summary of the papers main points.

Government Ownership

The proposal puts developing country governments, and their people, at the centre of the development process by requiring governments to develop their own national development strategies as the first stage in the process. The donors should support the government to develop the capacity to do so.

• Government assesses county’s needs in consultation with civil society and private sector;
• On the basis of this consultation the government defines its national development strategy; Government must then build national consensus for the strategy;
• Government should seek partnerships with civil society and the private sector to implement the strategy.
• There needs to be more collaboration between donors and the government when undertaking preparatory analytical work. This will help to improve the quality of the work (because the government is familiar with the country and is more likely to take into consideration social issues) as well as build more productive partnerships and strengthen ownership;
• joint preparatory work would seem to be particularly promising on governance and institutional issues. The government should take the lead on the public expenditure review.

Partnership With Civil Society And The Private Sector

Civil society and private sector participation in the design and implementation of the national development strategy is essential to the World Banks approach. The government will be responsible for consulting with national stakeholders on the contents of a proposed national plan and developing consensus behind it. There is no best practice method of selecting which groups the government should engage with.

• Each country should design a selection process that suits its own system based on the principles of transparency and credibility;
• consultation should take place at the national and subnational levels.

Donor Coordination

All donors currently develop their own country strategies which have a dual purpose of outlining the institutions view of the county’s development strategy and assessing it performance, and providing the institutions business plan in that country. These strategies are not coordinated between donors and therefore they tend not to be consistent or add up to a coherent assistance strategy which has a sensible allocation of resources across all sectors. Moreover, each donor has different reporting and budgeting requirements, different lending terms and different priorities. This has overburdened borrower governments which have limited managerial and bureaucratic capacity. The Banks strategy therefore emphasises donor coordination in support of the government’s strategy.

• The borrower government should be responsible for coordinating donor assistance;
• There should be continual dialogue between the government and donors (using latest communication technology), with at least one major meeting (the Development partners coalition – DPC ) a year, convened by the government and held in country;
• Parliament, the private sector and civil society should participate in the DPC;
• At the DPC each donor will draw up their own strategy which would contain analysis of the governments strategy and progress with implementation to date, and outline what action they will take to support it and how they will coordinate with other donors;
• Donors will commit resources on the basis of their individual assistance strategies;
• the Consultative Group or Round Table processes could be adapted to provide a forum for the DPC.

Selectivity

There are two dimensions to selectivity, 1) whether a country is willing and able to develop and take the lead in implementing its own strategy, ie., does it have the administrative capacity and political will to do so, and does it support an appropriate set of policies; and 2) donors need to be selective about which projects they fund

• For those countries with poor bureaucratic/administrative or political capacity, external financial assistance may diminish, at least in the short run, but there will be increased support for capacity building, narrower sector specific assistance, assistance to specific target groups and non-lending services;
• Work at the Bank (Dollar and Burnside) has indicated that aid is only effective in a policy environment which emphasises macroeconomic stability, exchange rate liberalisation, trade liberalisation, low inflation, balanced budgets. This implies that these policies should form the basis of a county’s national strategy, “the allocation of financial support by the international community should reflect the adoption of this policy framework” (page 23);
• There needs to be a division of labour between donors, therefore, they should be selective with regard to the sectors and projects that they support, ie., they should support only those elements of a programme in which they have a comparative advantage. If this means that donors need to shift their resources, between sectors for example, the details of such as shift should be worked out with other donors at the DPC;
• “Country specific frameworks” could be useful for identifying the relative strengths of individual donors in relation to each country, for example, some donors may be better suited to provide technical assistance, some to financial assistance, and others to working with civil society. It could also raise issues concerning reporting, budgeting and monitoring procedures;
• Partnership Frameworks would help to coordinate donors at the country level and would, provide agreement on the division of labour for providing financial assistance, as well as a mechanism for measuring success towards shared goals and adjusting relationships where necessary.

Concrete Short Term Actions Towards The Partnership Agenda

The Bank proposes that the following actions should be taken as an initial move towards the partnership approach:

• The Bank should support governments in convening national conferences on national development strategies and on developing appropriate consultative processes leading up to it;
• meetings should be held in borrower countries;
• meetings could be co-chaired by the Bank and the borrower government;
• Civil society and private sector groups could be included in CG meetings;
• The Bank could seek to share experiences with other MDBs and look at ways to extend this partnership approach to their activities; partnership frameworks could be developed with key donors.

Transforming The World Bank’s Partnership Culture

A lack of data about other donors and the dominance of an inward looking culture with the wrong incentives etc., currently limit the Banks capacity to move towards a partnership culture. Thus the bank intends to take the following actions to develop its institutional framework:

• Develop a Partnership Code of Practice – which would focus on how to attain true collaboration with partners based on recognised comparative advantage;
• Develop a Knowledge Management System – to collate and synthesize information on partners, partnership activities, on-going partnerships and success of partnerships, and incorporate a feedback mechanism for partners making use of new information technology;
• Develop a set of incentives to root partnership into Bank work and ethics.

Some Ngo Comments

• Donors come to CG meetings with their own agendas and preconceived expectations, this makes effective government/private sector/civil society input difficult; governments find it difficult to refuse any programme that is offered to them. Where donor and government priorities conflict, how will these tensions be resolved?
• How can development agencies be stopped from cherry-picking the key sectors, institutions and regions to work with/in?
• How will co-ordination be achieved among donors with different priorities for development?
• This proposal hinges on selectivity as a means of improving aid effectiveness. If the selectivity debate continues as is, governments and their people will be constrained from drawing up development strategies they think are most appropriate because they will have to prepare strategies which fit donors’ preconceptions about selectivity.
• All levels of government should be involved in the process, as should parliament.
• How will civil society representatives be chosen? There is a danger of NGO mafias forming, working in the name of civil society as a whole. NGOs may also suffer from the same problems of wasteful competition and duplication as development agencies experience.
• The document and the Bank often take a limited and reactive view of information disclosure. There needs to be more discussion of the “right to know”, and proactive means to share information: i.e. by press advertising.
• The Bank must not limit transparency on the basis of “sensitive information”. Donors strategy papers should also be published, including the Banks own paper.
• Process indicators should be developed by the Bank to show how policies and strategies have been drawn up.
• How is this distinction to be drawn between “committed governments” and ones which cannot take the lead?
• Bank capacity building work should be examined in more detail, e.g. what are training needs, how to support building of effective bureaucratic systems.
• The paper makes many good points about the World Bank’s internal dynamics and the obstacles to pursuing a real partnerships agenda. There is still a need to tackle reward systems and incentive structures. The partnerships logic should lead, for example, to WB staff getting credit for doing some preparatory work on a sector or country and then recognising that a bilateral or UN agency are the most appropriate to put in the funding.
• The paper recognises that building partnerships with diverse organisations may be time and cost-intensive. How does this interact with the Bank’s various cost-cutting initiatives?
• The Banks involvement in the SPA pilot project which coordinates donors has been very poor because it regards itself at the dominant partner. This, partnerships is often in the position of dominant partner, but this can seem less problematic when there are sensitive and sympathetic World Bank staff in place. The country pilots should be chosen with care that the right staff are involved.
• The Report seems not to mention export credit agencies, although Kwesi Botchwey and others recognise that they can be destabilising for countries’ finances, and have different expressed priorities from many other donor agencies.

July 1998

1. Dollar and Burnside, 1997, Aid, Policies and Growth, World Bank, Washington, D.C.