Final Draft December 2009 Bhavna Sharma, Marta Foresti and Leni Wild Table of contents

3.4. Engaging NSAs: Do No Harm

Kelsall highlights the need to understand both formal and informal accountabilities, and reminds us that donors can do harm to existing accountability relationships where they do not ‘go with the grain’ of pre-existing relationships. For example, he cites work by Jim Igoe which found that a pastoralist NGO in northern Tanzania, “built from grassroots on patron-client ties with elders”, was forced by donors to adopt a written constitution and formal procedures, resulting in the distancing of the organisation’s leadership from its grassroots base and undermining its effectiveness²⁷. More broadly, there is a danger that templates or models of NSAs are adopted which are at odds with the local context. This reaffirms the necessity of grounding any engagement with NSAs in a strong understanding of political context and adopting a ‘do no harm’ approach for engagement. Political economy analysis can provide useful tools to better understand the political context, including incentives and power structures, for NSAs, as Box 4 highlights.

Box 4: Key features of Political Economy Analysis
The importance of a good understanding of the political context, including its linkages to economic processes, is increasingly recognised by donors and other development actors as central to development policies and programmes. This is based on the recognition that (i) the way in which resources and power are distributed and contested within societies has a fundamental impact on how they advance; and (ii) technical and ‘best practice’ solutions risk overlooking the role of politics in development processes. In the last few years a number of analytical frameworks and tools aimed at assessing the political and institutional contexts of development have been developed, tested and implemented by donors as well as other agencies. Collectively, these tools can be described as political economy analysis (PEA).
Some of the core features of political economy analysis are:

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  a focus on politics and political processes
  
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  understanding the role of institutions and of formal and informal ‘rules of the game’
  
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  examining the configuration of interest groups and incentives underpinning political processes (including the roles played by patronage politics or rent-seeking)
  
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  reducing the potential for risk or harm as a result of an external intervention
  
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  helping to identify the potential for positive change which is politically feasible
  

In recent years, the international community - and donors in particular - have focused their attention on political economy analysis largely at the macro level or national context, including DFID‟s Drivers of Change or the Strategic Governance and Corruption Analysis (SGACA) framework developed by the Netherlands‟ Ministry of Foreign Affairs. The European Commission has developed guidance for “Analysing and Addressing Governance in Sector Operations‟ (see section 2 above). This approach combines technical and political approaches in its analysis of context, actors, governance and accountability relations at the sector level. There is a strong emphasis on moving progressively from poor governance to democratic governance, but also recognition that this requires a realistic and incremental approach starting from where the sector is rather than where it should be and that there is no „one size fits all‟ solution. Governance analysis is used to identify the governance „reform readiness‟ in a sector, with a focus on both demand and supply actors.

A political economy approach to analyse the national or sectoral context can be useful for donors and partners engaging in operational as well as policy work at different levels. For example, a PE approach to context analysis can help agencies traditionally concerned with financial and technical assistance to adequately consider the constraints as well as opportunities created by the political environment. Furthermore, political economy analysis is useful to better understand why and how certain policies and practices work (or not) in a given context, as opposed to what are the ideal solutions to generic problems. These issues provide important backdrops for the roles of NSAs, including in new aid modalities.
A key function of political economy analysis is to support donors and other agencies to do ‘no harm’, by providing a thorough analysis of the political and institutional context that can help a donor to avoid making mistakes, such as supporting unrealistic reforms or supporting actors (including some NSAs) in ways which undermine the overall context for development.
Source: DFID (2009) and EC (2008)

Section 4: Aid effectiveness and the role of NSAs

This section analyses the emerging aid effectiveness agenda, as enshrined at High Level Forums in Paris and, most recently, Accra. It highlights areas of overlap between this agenda and the emergence of new aid modalities, particularly regarding the focus on ownership of recipient countries. It looks at the roles of, and responses from, NSAs within aid effectiveness debates, highlighting issues and concerns that it will be important to engage with going forward.

4.1. The Paris Declaration on Aid Effectiveness

Despite considerable progress in a number of countries, poverty reduction and sustainable development remain a major challenge for many countries. A vast amount of money has been spent on aid and serious questions have been asked about its effectiveness. In recent years, donors have sought to respond to these challenges. This culminated in the adoption of the Paris Declaration in March 2005 at a High-Level Forum organised by the OECD DAC (known as HLF2). This Declaration established commitments for both donor and recipient countries to ensure more effective aid in a context of greater scaling up of aid, by 2010. A number of guiding principles were identified²⁸:

Box 5: Principles of the Paris Declaration

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  Ownership: Partner countries exercise effective leadership over their development policies, and strategies and co-ordinate development actions
  

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  Alignment: Donors base their overall support on partner countries’ national
  
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  development strategies, institutions and procedures
  
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  Harmonisation: Donors’ actions are more harmonised, transparent and collectively effective
  

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  Managing for results: Managing resources and improving decision-making for results
  
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  Mutual accountability: Donors and partners are accountable for development results
  

Source: OECD-DAC, The Paris Declaration on Aid Effectiveness, 2005

The OECD-DAC has led the way in driving this agenda, emphasising ownership by recipient or partner countries as the key tool to making aid more effective. While this represented an important conceptual shift, as an agenda it has to a large extent remained driven by donors.

The Paris Declaration includes recognition of the roles of both state and NSAs. For example, regarding ownership, the Declaration commits recipient countries to “broad consultative processes” and encourages “the participation of civil society and the private sector”. Moreover, for greater alignment, donors commit to building recipient countries capacity to “account for its policies to its citizens and parliament” and for mutual accountability, recipient countries commit to “reinforce participatory approaches by systematically involving a broad range of development partners” in developing, implementing and assessing national development strategies²⁹. Thus, the Paris Declaration acknowledges the roles played by a range of NSAs in ensuring ownership, in holding governments to account for the commitments they make and in participating in monitoring and other aspects which contribute to aid effectiveness.