Approche programme

Programme approach

Aid effectiveness is a target for donors but there can be divergences in the means to reaching it. The decline in the project-approach, considered too ineffective (low country-ownership, over-fragmented projects, high management costs…) has been accompanied by an increasingly programmatic approach which today tends to be the new beacon for development aid implementation. A programme approach can finance a sector, sub-sector or cross-cutting policy. SWAps (Sector Wide Approaches) define a programme approach applied to a specific sector. SWAps are more often developed in social service delivery sectors such as education. The adoption of the Millennium Development Goals and commitments for universal primary education led donors to finance recurrent expenses for the first time (salaries and operating expenses). Sectoral aid made this possible.

Programme approach: issues and goals

The programme approach is a commitment in terms of cooperation and provides a framework for donor/recipient relations. It is also a tool favoured for implementing the principles of the Paris Declaration on effective criteria for aid delivery:

Programme ownership by the recipient government which must design the strategy and goals to be met.
Donor alignment on strategies designed by the recipient country.
Harmonising procedures: financial partners share information and sectoral diagnostics and implement official development assistance according to common and rationalized procedures and appoint an arranger among the donors as the main interface with the recipient government.
Output-based management: it requires performance planning, management and analysis. Mutual accountability for the programme and its outputs.
The partner country must specifically build national capacities at each stage of the process (policy design, planning, implementation, monitoring and evaluation). The country will benefit from harmonisation thanks to reduced transaction costs in the implementation of procedures (fewer missions, single dialogue etc.).

Programme approach: achieving success

Success in achieving these goals means basing a programme approach on several critical factors:

Ensuring the recipient country has a national development strategy (often embodied in a Poverty Reduction Strategy Paper) along with coherent sectoral policies whose financial feasibility is defined in theMedium Term Expenditure Framework.
The institutional capacity of a country to implement sectoral policy.
Capacity building actions can improve programme management.
Donor commitments to provide predictable and stable aid.
Joint sectoral reviews between donors and the relevant ministries in order to monitor results. Monitoring results requires a reliable information system right through to the devolved level and the implementation of a series of indicators.
Agreement between donors and a sound achievement of aid harmonisation principles.

Financing methods for a sectoral programme

Sectoral programmes can be financed using the three following methods:

Global budget support by directly disbursing aid to the recipient country budget in order to support medium or long term poverty reduction strategies. Global budget support finances all areas of a country’s development policy and is therefore a way to finance a sectoral programme.
Sectoral aid refers to harmonised financing for a sectoral policy and can be in budgetary form (direct aid for the current account of the Department of State for Finance, special appropriation account of the Department of State for Finance) or off-budget (certain basket funds).
Project aid is funding granted to a State, public establishment or private entity. Funds are generally non-fungible and do not use national budget procedures with easy traceability and a priori expenditure control. Donors can finance a programme component in the form of project aid.

Issues to integrate in the choice of financing methods

Certain elements need to be integrated when arbitrating between various financing methods:

The macroeconomic environment (budgetary balance, fiscal situation…) can orient the choice of financing method towards or away from budget support.
The quality of public finance management: transparency, budget credibility, control, implementation and flow of the budget circuit need to be checked in order to assess the risk of funds being used otherwise than provided for. If this risk is considered high it can lead to earmarking aid or the use of project aid.
Controlling additionality whenever possible ensures official development assistance does not replace domestic efforts in the sector.