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Aid effectiveness - managing aid for best results

At HLSP we have made a commitment that development assistance, whether to health or to any other sector, should be used effectively and support national development efforts to get people out of poverty and help countries meet their Millennium Development Goals.

There is substantial international consensus on the focus of development assistance for achieving the Millennium Development Goals›. OECD countries have agreed to harmonise their aid mechanisms and requirements, and to align with government owned national policy and strategy. In the Paris Declaration on Aid Effectiveness› of March 2005 countries signed up to key targets, including a commitment to provide at least 25% of all aid through 'Programme Based Approaches' by 2010.

Yet, in spite of international consensus, a substantial proportion of aid provided to most countries continues to be delivered in ways and through channels that do not serve the alignment and harmonization principles. For example, much aid for health is tied to specific disease interventions, geographical areas or commodities, or delivered in the form of projects with high transaction costs.

Improving aid effectiveness
There are many outstanding questions about using aid effectively. What are the comparative advantages of sector or budget support versus global health initiatives (such as the Global Fund)? How can new finance for major diseases strengthen - and not distort - national health priorities and systems?

The HLSP Institute is helping to enhance the knowledge base with which to answer these and other questions. Our strengths are based on rigorous policy analysis and country-based research, with agencies such as WHO, UNAIDS, SIDA, DFID and the Bill and Melinda Gates Foundation.

Our areas of expertise on aid effectiveness encompass, among others, the following:

Poverty reduction and growth strategies – known as Poverty Reduction Strategy Papers (PRSPs). PRSPs are a leading instrument for national planning in many low and some middle income countries. A PRSP is also required for debt relief through the Heavily Indebted Poor Countries (HIPC) Initiative, set up in 1996 by the World Bank and the International Monetary Fund. The Paris Declaration aims for at least 75% of partner countries to have an operational development plan, such as a PRSP, by 2010.

The sector wide approach (SWAp) has developed as a way of working between governments and donors during the last ten years. There are now about 20 low income countries with SWAp-type management arrangements in the health sector, where all significant government and donor funding for the sector supports a single sector policy and expenditure programme, and government leads the process and its implementation.

Global health partnerships are internationally co-ordinated initiatives that seek to tackle the major communicable diseases of poverty. They aim to generate resources and commitment where research and programme delivery efforts have been fragmented, poorly co-ordinated and insufficiently financed. The need for Global Initiatives to adapt to and strengthen national health systems (thus avoiding ad hoc parallel arrangements for implementation) is being increasingly recognised.

Budget support is channelled directly to partner governments, uses national accounting systems and is linked to sector or national policies rather than specific project activities. Finance is often linked with agreement on a poverty reduction strategy and a related budget framework such as a Medium Term Expenditure Framework as the basis for un-earmarked funding.

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