Recommendations and Issues for Further Consideration

Efforts to strengthen assessment instruments should focus on several pressing concerns-including increasing integration and improving coordination and cooperation, addressing institutional and governance considerations, strengthening follow-up and performance monitoring, and developing a programmatic and modular approach.

INCREASING INTEGRATION AND IMPROVING COORDINATION AND COOPERATION

Development agencies growing use of public expenditure and financial accountability assessments has brought to the fore the crucial link between good public management and effective aid. Since the late 1990s there has been broad consensus that the most pressing question for development is not whether aid has been effective, but where it has been effective and under what conditions (World Bank 1998a; Collier and Dollar 1999). It has become clear that aid is most effective when it supports sound policies implemented by legitimate governments. In a major advance, development agencies are now accountable for assessing the risk that aid resources will be stolen, allocated to activities other than those in government budgets, or simply wasted.

The problems of duplication and lack of coordination among assessment instruments pale in comparison with this advance. Still, as reported

by agency staff and confirmed by government officials, duplicated efforts and uncoordinated assessments impose high transaction costs on recipient governments-especially given these governments limited administrative and financial management capacity. (In some cases agencies do not even try to avoid scheduling missions when budgets are in the final stages of preparation-an extremely busy period for ministries of finance.) Moreover, this state of affairs has sometimes resulted in superficial, overlapping, or incomplete analyses and prevented the provision of coherent advice and systematic feedback to recipient governments and sponsoring institutions.

The Task Force on the Harmonization of Donor Practices-sponsored by the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD)-recently commissioned a survey of the burdens that donors have placed on eight recipient governments. Although the survey did not focus on the instruments of concern to this study, several of its findings are pertinent. First, the overlapping, donor-driven, and often rushed approach taken by donor missions placed excessive demands on government officials, with different missions asking the same people similar questions again and again. Uganda, for example, hosted six missions at the same time, with four asking similar questions of the same people-and all were World Bank missions.

Second, multidonor missions can reduce such burdens, but not always. When all donors insist on direct involvement, it can result in unmanageable and incoherent missions. Thus there is a need for donors to accept analytical work conducted by other agencies. Third, in Bangladesh and Tanzania the survey found that donors demanded an unrealistic scale and pace of reform, based partly on insufficient understanding of country circumstances. This point underscores the need for better understanding of a countrys institutional and governance context when actions are proposed to address weaknesses in public expenditure, procurement, and financial accountability systems (University of Birmingham School of Public Policy 2002, p. 9).

Another recent study, sponsored by the Strategic Partnership with Africa (SPA), reviewed the experiences of several African countries (Burkina Faso, Malawi, Mozambique, Tanzania, Uganda) in undertaking participatory CFAAs. The study concluded that there was often poor coordination within CFAA teams and between CFAAs and other instruments, and sometimes insufficient government participation and collaboration. And while partic-

ipatory approaches are intended to lower transaction costs, that does not always happen. Although some of the CFAAs were carried out at the same time as PERs and Fiscal ROSCs, the different teams did not coordinate their interactions with government officials. As a result the administrative burden was the same (Reite 2002).

Thus, this studys first recommendation is perhaps the most obvious: no consideration should be given to creating or expanding assessment instruments until duplication and coordination problems are resolved to the satisfaction of all concerned.1 Many of the studys other recommendations- based on the mapping exercise, reviews of assessment guidelines and reports, and interviews-also involve improving coordination within and between development agencies and partner governments. But before discussing ways to improve coordination, it is worth identifying constraints on harmonization and integration of the various instruments.

Constraints on harmonization and integration

Because assessment instruments are products of individual development agencies, the issues covered and methods used naturally reflect agency objectives. These instruments will always reflect their origins, and there are many incentives to keep them separate products, including:

Development agencies are overseen by boards, ministries, legislatures, supreme audit institutions, and other entities to which they are ultimately accountable.

Boards and senior managers usually demand identifiable products with the stamp of the agency, oversight body, or both.

The staff responsible for assessments often work in organizational silos and lack incentives to work collaboratively within their own organization or (to an even lesser extent) with other agencies.

There are also significant differences in the specific objectives for improving public expenditure management. For example, the rationale and objectives of EC audits may be partly driven by statutory imperatives, or in the case of both EC audits and DFID assessments by demands from legislatures, audit institutions, and other oversight bodies for better fiduciary assessments. Similarly, there is growing pressure from the boards of the World Bank and IMF for stronger coordination and collaboration between the two institutions on public expenditure management issues (World Bank