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Paris, s’éveille – waking up to the Paris Declaration

Paris, s’éveille” (Paris wakes up), sang Jacques Dutronc, observing how the mess of the night is cleaned away, making place for the buzz of another day of work. Likewise, the WASH sector is waking up to the Paris Declaration, cleaning up the mess of often uncoordinated aid efforts. This declaration laid out the principles for aid effectiveness, including, ownership, alignment, harmonization, managing for results and mutual accountability, all commendable and logic principles, that few would object to. However, putting these into practice is taking time, as if slowly waking up and starting the day with small tasks, before one is ready to see the result of the clean-up. Our work on life-cycle costs – and broader aid effectiveness – in the Honduras WASH sector illustrates how messy aid to the WASH sector sometimes can be, but also what small steps can be taken to clean up things, towards the implementation of the Paris principles.

Let’s start with the wake-up call: the fact that the (rural) WASH sector is still highly donor dependent. The graph below shows the source of a selection of 41 capital investment projects in rural and small town water supply, carried out by FHIS (the Honduran Social Investment Fund). As can be seen, external sources formed the bulk of these, basically loans and grants both from development banks and bilateral donors. Ok, part of this are (soft) loans that eventually need to be paid back, so could be reclassified as coming from the national government. Contributions of national and local government, as well as from communities, are almost all in the form of matching funds. Only few of these investments were done fully with national funds.

 

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Graph 1: Source of funding of capital investment projects

A further break-down of how these funds are spent shows a very messy picture. The 114 water projects we analysed were carried out in any combination of 4 different forms of procurement (including different forms of tendering and direct assignment), 4 different forms of project implementation modalities (including centralized by national government, decentralized by local government, and fully community-executed) and 5 different forms of programme management (for example with or without a dedicated project implementation unit). Fortunately, not all the 80 mathematically possible combinations were found. Still, these 114 water projects, funded through 11 different programmes, were carried out through a whopping 19 different combinations of project implementation procedures. The variety would even be bigger if we had included more detailed rules on for example cut-off lines (the maximum amount above which a project is not considered financially feasible) or co-financing percentages. Needless to say that this huge variety often causes confusion – when to use which procedure and why.

Some of these different project implementation procedures are due to the government’s procurement rules, e.g. projects of more than a certain amount need to follow different tendering forms than ones that cost less. But the main reason for the large variation is simply because of demands and requirements from the funder to follow one procedure or the other. To my surprise, this is often considered simply as just a given. As one of the participants in the discussions on this commented: “oh, but you know, those exact rules for project implementation are defined by the funder”, without questioning whether that is the way it should be. If one of the principles of aid effectiveness is ownership, shouldn’t it be the government who develop sets of programme implementation procedures? If another principle is the alignment of donors with government’s systems, why then do the donors indicate which procedures to follow?

Lack of information on costs and effectiveness is one of the reasons for this situation. Neither donors not the government have had detailed data on how much these different modalities costs, or which of the implementation procedures is most relevant or effective for different types of projects. If a country wants to take ownership, it needs to have the information and criteria to be able to set the rules.

But Honduras is now waking up to the Paris declaration, as evidenced in some recent initiatives. One is the development of a harmonized sector budget, bringing all the flows of loans, grants and national contributions into one single budget overview. That is a first step to see which programmes are there, and how much they invest. Another example is the development of a national investment plan for water and sanitation. Instead of developing infrastructure based on whatever programme can be negotiated with funders, there will soon be a plan to which funders can buy in to. We hope to contribute as well by analysing information on the costs and effectiveness of different forms of project implementation, for example in terms of the average costs of the projects that were developed. So far, the results were disappointing: there is no indication that this is the case (or maybe we should take the old academic slogan of “no result is also a result” more to heart). Probably that is due to the fact that we have considered only the direct costs of infrastructure development (the physical works, the social process around it, and the costs of studies), but not yet the overhead costs of for example supervision, monitoring and programme management, which are likely to be different for the 19 combinations of project implementation. This will hopefully provide information for decisions on coming to a more manageable set of procedures– or probably sets, as probably there will be need for some diversity according to the type and size of project.

As one of the participants in the meeting said: “I can see that we are slowly creating some order in the water sector, slowly but steadily. But we need the information to do so”.  The wake-up call has been there, the mess in the house has been noted, and a good start is being made to clean up the rooms. With these tasks on their way, hopefully the aid funding Honduras receive for WASH can be used in a way that makes the sector buzz.

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3 comments on “Paris, s’éveille – waking up to the Paris Declaration

  1. Nice blog Stef. Spot on! One of the first studies in the sector- at least that I know of- that evidences the fragmentation in the sector so clearly. It would be interesting to do similar studies in countries that are assumed to do better according to the Aid Effectiveness (AE) principles. Take for example a country like Burkina Faso. With a donor coordination platform established , an annual joint sector review in place, a SWAP in implementation including a sector policy, a sector strategy and one sector programme with a 2-3 year sector budget, and with general and sector budget support (next to project funding), all elements seem to be in place for the sector to make effective use of “aid”, at least according to the AE principles. But I am afraid that the situation as you described for the sector in Honduras does not differ significantly from the reality on the ground in Burkina Faso, and from the reality in the sector in so many other countries who may score higher on the AE checklist. This may partly be explained by the incompliance with the AE agenda of a number of (new) donors but at the same time it seems to point to a lack of capacity in the partner countries to negotiate with the donors how much, and in what form and under what conditions aid should be delivered. Stef points to the lack of information on the costs of the different (project) modalities, or on which of the implementation procedures is most relevant or effective for different types of projects, that makes it very difficult for the government to take the lead in setting criteria and the rules for project implementation in the sector. The mentioned insights in costs of different project modalities and effective implementation procedures in particular, or country specific information and knowledge more generally may be the missing elements for countries like Burkina and others who seem to do relatively well according to the AE principles but who still struggle to make more effective use of donor funding. Acknowledgment of the value of context specific knowledge for strengthening national sector capacities – so the sector achieves a better position to take the lead in directing donor support-, would add a new dimension to the AE debate and agenda.

    The above considerations make me aware how little is really known on how AE plays out in the WASH sector, at country and in particular at decentralized levels. AE in the WASH sector seems to be a relatively unexplored area. The study in Honduras not only makes an interesting contribution to the sector knowledge base on AE in WASH but hopefully triggers more similar pieces of work in other IRC programme countries and beyond.

  2. Hi Erma,
    thanks for the nice feed-back and thoughts on the wider implications for other countries that are pursuing the Paris Declaration. Indeed, I think this kind of studies is particularly relevant for the Paris principle on the use of countries’ systems and procedures. That goes beyond a simple check whether donor funds flow through the Ministry of Finance or as parallel programmes. It requires going into the nitty-gritty of the conditions and implementation procedures for the funds, even if they do go through the countries’ systems, as these systems may just be adjusted upon donors’ request. There is nothing wrong with that, as long as it is clear whether those requirements indeed make sense, e.g. in terms of better efficiency, effectiveness or transparency, and as long as the good practices that result from that, are applied more widely as standard procedures. I think the latter has been missing in Honduras. I think some of the practices for project implementation that have been developed under some donor programmes are very relevant and with huge potential to improve effeciency, such as the projects PEC (where the community is responsible for doing part of the procurement and contracting). But if indeed this is a big step forward, then it should be systematized and become a standard procedure in any programme (or at least for the ones to which it is applicable). i think that last step is missing but can hopefully be more institutionalized.
    All the best,

    Stef

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