Sector-wide approaches [SWAps] in health: an overview Tom Merrick, World Bank Institute

1. Sector-wide approaches [SWAps] in health: an overview Tom Merrick, World Bank Institute

2. Objective & issues to address: Objective: provide an overview of SWAps Issues to address: • Emergence & popularity of SWAps • What SWAps are, their core elements • Readiness criteria for SWAps • SWAp financing options • Advantages & disadvantages of SWAps

3. Why emergence, popularity of SWAps Three key sets of underlying reasons: • shift in macro-economic dialogue from SAPs to public expenditure management • recognized need to ‘reform aid’ • opportunities provided by sector reform programs

4. Why reform aid? • Problems with ‘project modality’ : • Distortion of sectoral policies & budgets • Minimal national ownership • Undermining existing national systems • Burden on recipient governments • High operating/transaction costs • Inflexibility; one size fits all • Varying standards of service provision

5. Objectives SWAp is expected to achieve • Address fundamental issues/problems of ‘project aid’ modality • Increase aid effectiveness • Restore ideal DCG/donor relationships • Establish greater coherence between policies, programmes and budgets • Demonstrate ‘programme approach’ • Scale-up positive lessons learned

6. What then is SWAp? Various definitions; new concept; understanding still evolving • aid coordination mechanism; aid modality • way of managing development assistance • partnership between govt. & donors • approach to sectoral development • integrated national programme for policy reform in a sector, SDP (UNICEF)

7. Common definition • A method of working b/w govt & DPs • All significant funding for the sector supports a single policy and expenditure program • Govt. provides leadership • Common management approaches applied across the sector by all partners • Programme progresses towards relying on govt. procedures to disburse and account for all funds

8. Core elements/attributes of SWAps • sector-wide in scope • agreed coherent policy framework & strategy • national government leadership • all/most donors sign on • common/joint work program • common management arrangements: • disbursement and accounting of funds • reviewing performance • move towards reliance on govt. procedures

9. Budget support Variations in sector aid arrangements Sector reform program Project type aid Earmarked funds Pooled funds Stand alone projects

10. Project Self-contained One implementing agency, one or a few financiers Projects have own support systems Implementation by a project unit overseen by a management committee Project has clear beginning and end Sector Program Open-ended and complex (covers many projects and activities) Many implementing agencies, many financiers Common support systems Project unit/management committee model cannot cope with complexity of program Program is a rolling process with continuous planning, implementation Contrast Project and Sector ProgrammeApproaches

11. What is the “health sector”? • How the “health sector” relates to the “health system” • Does the sector refer to public sector only, or public and private actors? • Health outcomes are influenced by forces inside and outside the health system — how does SWAp address factors beyond health care?

12. How wide is sector-wide? • Ideally, a SWAp should capture the full spectrum of activity, financing and participation in the health sector • In practice, most SWAps only capture public expenditures (approx. 50% of total sector expenditure) • However, as SWAps mature, planning and budgeting functions capture more fragments of existing programmes, and new investment

13. Risks/common concerns in SWAps • Reduced/static govt. spending on health • Weak government capacity to implement/manage programme • Inadequate ownership/participation of wider stakeholder group • Disruption of services [transition] • Suitability in decentralized systems

14. Risks/common concerns (2) • Loss of focus/fungibility • Weak accountability environment • Loss of attribution • Increased demands on government performance • Treatment of some issues [RH,gender] • No window on the poor • Capacity of govt to deal with NGOs, PS

15. Risk: support systems during transition • Projects often have own procurement, training, info. & communication systems • Sector-wide management often brings common arrangements • Well-functioning programs risk being undermined by poorer ones • Timing of shift to common support systems critical • Part of donor reluctance to abandon projects

16. Advantages of SWAps (1) • Increases predictability of funding; [govt./DPs] • Places government squarely in charge, guided by policy and planned with knowledge of available resources • Identifies priorities; improves financing base • Reduces transaction costs (arguably) • Applies interventions equitably, avoiding geographic disparities

17. Advantages (2) • Increases transparency of resource • Improves accountability • Increased value for money • Easier to disburse funds • More effective partnerships • Employs performance monitoring and uses an evidence-based approach • DPs: greater influence over policies, priorities, expenditure

18. When is SWAp most likely to succeed? Where: • public expenditure in sector is high • donor contribution is large • donor co-ordination could be a problem • donors willing to harmonize procedures • agreement on strategy b/w Govt. & DPs • supportive macro budget environment • good fin/accountability mechanisms • institutional relationships manageable • relatively adequate national capacities

19. SWAp financing options • Pooled or basket funding [budget support] • thru/managed by govt. [preferred] • managed by a partner • Pooled with earmarking • Parallel funding [for activities in program]: • traditional projects • direct provision of goods & services • Mixed [some donors do both] • Example: Ethiopia: 3/4 channels

20. ‘Pools’ vary: scope, operation, coverage • Zambia: district basket restricted to non-staff, non-drug costs • Tanzania: district pool prescribed by spending categories; ceiling set at 50 US cents per capita • Mozambique: operates a drugs procurement and distribution pool for all levels of service delivery in the country • Time sliced financing” in Bangladesh: WB reimburses part of govt sector expenditure

21. Advantages of Pooling • Focuses on strengthening govt. systems • Transfers control to govt. • Lowers transaction costs; eliminates duplication of financing • Collective risk; govt. & DPs • Improves predictability of long term financing • Promotes transparency, flexibility • Improves coordination for greater impact on agreed priorities • Easier to disburse funds

22. Problems with Pooling • Requires strong government systems for management and accountability • Requires harmonization of donor procedures • Donors lose attribution to specific activities and outcomes • Fungibility/diversion of funds

23. SWAps and health sector reforms • SWAps not synonymous with HSR • SWAps one of several reform initiatives, including the following: • Decentralizing budgeting/management of SD • Separating financing from provision of services • Introduction of new financing/payment schemes • Devolving ownership of tertiary-care facilities • Shifting donor funds from projects to SWAps • Reorganizing MOH; redefining roles of units

24. SWAps & other development initiatives • Poverty Reduction Strategies (PRSP) • Local government reform/ decentralisation • National Development Strategies and Perspectives (e.g. CDF; Vision 2025;…) • National ublic service reform programs • Public Expenditure Reforms(e.g. MTEF) • Macroeconomic growth or decline and debt servicing (e.g. HIPC II)

25. New funding modes: sector-wide approaches (SWAps) • Program vs. project funding • Agreed sector policy framework, often as part of broader reform process • Government capacity to manage integrated sector program is critical • Donor roles and coordination: pooled (or “basket”) vs. parallel funding • Roles of specialized agencies

26. Risks and benefits of SWAps • Reduced fragmentation of government effort, more coherent focus on priorities • Government “in the driver’s seat” • Is government able to manage sector programs effectively? -- transition issues • Risks to priority programs that had project support (e.g. problems with procurement and technical assistance) • Special challenges faced by UN agencies and NGOs

27. Country examples (experience to date is fragmentary, mixed): • Bangladesh: restructuring underway, capacity problems (procurement) • Ghana: already reforming, SWAp in tandem with other reforms • Ethiopia: innovative funding model, program disrupted by war • Zambia: one of the first, not enough involvement of key stakeholders