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Yuriy Zaytsev National Research University - Higher School of Economics Moscow, Russian Federation

Multilateral Mechanisms for Managing International Development Assistance. The Challenge of Effectiveness and Reform. Yuriy Zaytsev National Research University - Higher School of Economics Moscow, Russian Federation. Why Multilaterals? Multilateral versus bilateral mechanisms. Pros:

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Yuriy Zaytsev National Research University - Higher School of Economics Moscow, Russian Federation

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  1. Multilateral Mechanisms for Managing International Development Assistance. The Challenge of Effectiveness and Reform YuriyZaytsev National Research University - Higher School of Economics Moscow, Russian Federation

  2. Why Multilaterals? Multilateral versus bilateral mechanisms • Pros: • Economy of scale; • Political neutrality; • Legitimacy; • Country programmable aid; • Flexible delivery mechanisms. • Cons: • Institutional complexity; • Insufficient data and indicators on multilaterals’ effectiveness. • The capacity to mobilize and concentrate greater aid volumes; • Country programmable aid principle implementation; • Capacity to address the crisis situations.

  3. The Scope of Multilateral Institutions • Three types of multilaterals: • IFIs; • UN agencies; • Global and regional bodies. • 33 per cent of the gross ODA (~USD129 billion); • Prevalence in Sub-Sahara Africa, South and Central Asia; • Provide less unspecified assistance; • Preferred mechanisms by Brazil, China, India; • Additional sources of financial flows.

  4. ODA, provided by DAC countries to multilaterals Source: OECD Creditor Reporting System

  5. Contribution of DAC members into multilateral organisations (2004- 2009) Source: OECD DAC Report on Multilateral Aid, 2010

  6. Key Forms of Managing Development Assistance • Cooperation with international institutions; • Cooperation with sovereign donors; • Trilateral cooperation: emerging donor and traditional donor; • Trilateral cooperation: emerging donor and international institution. • Social and economic regional development: • Health; • Education; • Infrastructure • Integration of partner countries into the processes of global economy: • Aid for Trade; • Investments; • Value added chains project support budget support sector wide approaches

  7. Need for post-crisis reform • Coordinated Inter-institutional Mechanism: UN bodies, World Bank, (?) International Aid Office (?) International Development Aid Fund (?) UN Sustainable Development Board OECD DAC Donors’ club • UN Funding Mechanism • reach countries’ contribution formula • list of eligible countries

  8. Challenges of Aid Effectiveness Factors of Aid Effectiveness Barriers of Aid Effectiveness • Lack of skills and capacities for managing aid programmes; • Insufficient infrastructure; • Lack of capital and investments; • Market failures; • Protectionism and trade barriers; • Weakness of national institutions. • Coordination of multilateral and bilateral donors; • Transparency and accountability in financing aid programmes; • Decreasing the number of duplicating programmes at country and sector level; • Decreasing the fragmentation of provided resources; • Refusing the practices of aid conditionality; • Strengthening governmental control over aid financial management; • Public procurement; • Country programmable aid Contribute to donors’ effectiveness assessment, but do not assess the impact of aid for developing countries

  9. Managing for development results • good governance • country ownership • harmonization • alignment of donor efforts • measurable results • accountability for development results • Mobilizing international efforts to comply with commitments; • Increasing efficiency of programs implementation at the local level

  10. Do partner countries have managing for results frameworks? Notes: A – supported practice; B – advanced practice; C- the measures are undertaken; D – some elements of the system exist; E – insufficient measures are undertaken Source: World Bank, Results-Based National Development Strategies: Assessment and Challenges Ahead, Washington, DC: World Bank, December 2007.

  11. The way Forward to Implement Managing for Development Results Strategy • Strengthening national ownership; • Shifting the emphasis form outputs to outcomes; • Global Partnership on Managing for Development Results; There is no ready solution to establish Managing for Development Results Framework

  12. The way to achieve the progress • Short-term recommendations: • Increasing the flexibility and adaptation to the needs of partner countries; • Reconsidering key mechanisms for financing and replenishing funds of international institutions. • Long-term recommendations: • General system for assessing the efficiency of the aid projects delivery; • Strengthening the competition among donors through system of different MfDR frameworks; • Decreasing the influence of bilateral donors on partner countries; • Shifting from sector and region division of labourapproach to competition approach

  13. Thank you for attention!

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