Progress has been made in rationalisation and harmonisation of processes with a view to reducing transaction costs. During 2002/03 a study was launched by the TAS group to identify the scope for rationalising and harmonising the cycle of existing processes and consultative mechanisms. Discussions of the report of the study revolved around five areas.
First, rationalising linkages and timing between the budget cycle, PMS and PER processes.
Second, harmonisation and further coordination of key economic related processes such as PRBS, PRSC, PER and PRGF.
Third, strengthening the linkages between macro and sector processes. Steps were taken to ensure that the PER process was underpinned by sector working groups and thematic groups. The annual PER process has continued to evolve into a key process used by all stakeholders to review budget performance in respect of its execution and resource allocation and providing inputs into budget planning and management during the coming year.
Fourth, rationalising DP processes within the PRS/budget framework with a view to reducing duplication and the associated transaction costs.
Fifth, steps have been taken to make the Consultative Group meetings more efficient and capable of maximising synergy with on-going policy processes.
Alignment of DP calendars to the national calendar has improved through the PER/MTEF processes and by drawing a calendar of a rationalised cycle of policy mechanisms and consultative processes. The calendar is increasingly being adopted . Progress in this matter is bringing the timing and output of all processes in line with the PRS and budget cycle. More specifically, “quiet times” have been identified with the aim of providing GOT with adequate time to concentrate on preparing the budget and participation in the Parliament budget sessions.
Some DPs have felt that quiet times are too long and should be revisited. It also depends on how they have been utilized. The other opinion is that it may be too early to come up with concrete conclusions on quiet times (April-August) at this stage . Government and DP representatives contacted during preparation of this study confirmed that by and large the quiet period rule is observed. DP’s tolerance for quite times is likely to be correlated to their perception of how fruitful and meaningful cooperation mechanism are for the rest of the time.
Monitoring and evaluation is beginning to be institutionalized. However, GOT needs to define more clearly what is meant by evaluations and for what purpose they are made. In some cases annual reviews are so frequent or are so delayed that learning from those evaluations and reviews is not encouraged. In addition, various systems of monitoring and evaluation have yet to be harmonized. Currently, the Ministry of Finance and President’s Office Public Service Management are working towards harmonization of their M&E systems.
Progress has been made in the use of common reviews frameworks such as the Performance Assistance Framework (PAF), which has increasingly been drawing from policy reforms and national priorities and policies contained in the PRS. Early completion of common reviews of frameworks such as PAF prior to the start of the FY has enhanced predictability of resource flow as potential hitches are sorted out early enough to allow smooth resource flows. The move away from rigid and one-sided (donor-driven) conditionality towards the adoption of jointly agreed prior actions that are an integral part of the government’s reform programme has been consistent with promoting GOT ownership and leadership as well as reducing uncertainty in external resource inflow. Policy dialogue has made progress especially in terms of architecture but there is a challenge of PRBS vs PAF in terms of reconciling national priorities and external conditionalities.
The Joint Assistance Strategy (JAS) is planned to move TAS to a higher stage of attaining national ownership and leadership in the development process, reduce transaction costs by enhancing harmonisation and alignment to national priorities and national systems. JAS is intended to be a broad framework for all partners (domestic and external) to operate at a higher level of commitment to the principles of best practices in development cooperation as stated in TAS and hopefully to be more concretised in JAS. It is envisaged that JAS will replace individual donor country assistance strategies as one way of reducing multiplicity of donor processes and enhancing aid coordination and promote collective support to Tanzania consistent with its national development goals and priorities. JAS is expected to contribute to consolidating and institutionalising current efforts towards harmonisation, alignment and managing for results.
In the proposed JAS framework, a clearly defined mechanism of how the GOT as leading actor should be interacting with other partners such as the civil society, the private sector and development partners. The challenge is for GOT to be clear about the rules of the game, priorities and how dialogue should be conducted.
The shift towards joint assistance strategy (JAS) is being supported and consultations are being made with key stakeholders. The Ministry of Finance has taken the initiative to discuss the drafts of JAS openly. While TAS has taken a more or less voluntary stance in its approach, JAS is going to take a more definitive stance in outlining government principles in a framework that DPs are required to align to. For instance, JAS is very firm in requiring all donors to channel all information on all their resources flows through the Exchequer.
The GOT has continued to avoid saying NO to DPs who may be operating against the spirit of TAS. The perceived risk that DPs will be scared away by the GOT being firm is not based on any empirical evidence. In our judgement, if the GOT is clear about the national objectives and priorities, many donors will agree to operate according to national objectives and priorities considering that such a requirement is consistent with the Rome Declaration to which the donors are signatories. In that case saying NO to donor practices which are not consistent with national objectives and priorities is not likely to scare away DPs and aid flows as often perceived by most GOT officials. However, saying ‘no’ also requires GoT to feel reasonably confident about its own prioritization process. This implies that an internal job will have to be done to ensure that the prioritization process across government is respected. Prioritisation that is grounded in the political system and other local constituencies are taken on board is more likely to be respected and defended constructively.
Historical reasons, which made Tanzania so subservient, need to be addressed with a view to adopting different ways of doing business in aid relationships. The evolution of JAS should take into account key issues such as comparative advantages of various DPs, separation of TA from simple financial resource allocation and take up TA based on a single assessment framework. There is the challenge of the Management of risks and expectations, identifying win-win situations.and reducing transaction costs. The challenge is to manage risk and mitigate its effects. Some of the mitigating factors could include enhancing dialogue, making the necessary adaptations and adjustments on the capacity and orientation of the country offices. In view of these observations the following recommendations are made:
First, it is recommended that the risk of reduced aid be managed objectively including the willingness to consider various ‘exit’ scenarios more explicitly.
Second, it is recommended that development partners should restrain themselves from giving government officials subtle messages that they could reduce aid if their proposals are not accepted. DPs should make efforts to give space to Tanzanians to make decisions based on ownership and leadership.
Third, it is recommended that the GOT should develop common rules and modalities of operation and let DPs who want to conform do so and those who do not want to conform may be allowed to stay out until such time that they are ready to rejoin. It should be appreciated by all partners that the cost of disruption of the national priorities and national processes with the associated high transaction costs may be higher than the loss of resources resulting from staying out. In our opinion, even in the worst scenario, where aid flows are reduced for this reason, still the lower level of resources is likely to be more effective as distortions from diversionary aid flows are reduced and transaction costs are reduced. In fact, the most likely scenario is one in which some donors may withhold support temporarily or in the short run. A most likely scenario is one where the donors who withhold resource flows just for that reason will come back after they have considered the implications of staying out. We are convinced that withdrawal for that reason is no longer credible and is not likely to be supported by their capitals as legitimate considering that those capitals signed the Rome Declaration which articulates harmonization and alignment principles and shows explicit recognition of the importance of country ownership and leadership in the development process..
Fourth, in order to mitigate against risk of loss of aid resources for that reason, it is recommended that the GOT should solicit agreement with the more supportive donors that they would agree to compensate Tanzania for the loss of aid flows for reasons of promoting ownership and leadership.
It has been cautioned that joint strategies can suppress important differences of opinion and approach implying that mechanisms for settling and harmonising such differences would have to be in place or if they exist they would need to be strengthened. This is not a minor concern, especially for some bilaterals and NGOs. The need to strengthen dialogue mechanisms in support of a JAS is crucial, but it also relates to internal incentives for harmonization and alignment within donor agencies and arguable within NGOs. Many are committed rhetorically, but have incentive systems of their own that undermine commitment to more radical approaches like a JAS. Donors wanting to engage in a JAS need to re-examine critically their own incentives systems and internal political drivers simultaneously. In this respect, GOT, especially some line ministries, will also have to revisit the incentive structures which draw action against harmonisation.
