Country Ownership: A Perspective on Development Funding

 

A core aspect of country ownership is the idea that countries set their own strategies and lead implementation.  The majority of developing countries have prepared national strategies to address developmental issues with developmental partners contributing towards financial assistance.

But is the envisaged funding always strictly aligned to national priorities? The country ownership concept has been endorsed by both donor and recipient nations as part of The Paris Declaration on Aid Effectiveness. It has also been reaffirmed many times over, such as the Busan Partnership Agreement. Yet putting the principle into practice remains a challenge.

There are international supporting instruments to facilitate the design of development financing. However, key questions remains if they are applied to influence the design of development financing including dictating the terms and conditions, particularly for developing countries.

Putting country ownership into practice means donors/donor countries ceding tight control over the purse strings in favor of flexibility to meet recipient/developing country needs.  For developing countries this means committing to be ambitious in national objectives and working with donors and citizens to lead program design.

This covers design of delivery vehicles, enhances participation, and maintains control. At the heart of this flexibility, developing countries should attach deeper empowerment in the programing landscape.

Three broad models of balancing ownership and accountability are in use in the current development finance landscape. The ‘emphasis on accountability model’ favors contributor-centered accountability, often at the expense of recipient country ownership.

While there may be some attempt to align funding with national priorities, under this model contributors retain considerable control over how funding is used and which institutions it is channeled through and to whom. Although this model is currently prevalent, it is neither empowering to recipient countries, nor does it strengthen country accountability systems.

This model is appropriate only in countries with very weak accountability systems and little political will to reform them-a relatively rare combination. Post-conflict countries (where country systems may be fragile and unreliable) and countries plagued by high levels of corruption (where there is a high risk of mismanagement of funds) may be appropriate venues for this model.

In the ‘transitional shared ownership and accountability model’, the recipient country has partial ownership of finance, but the contributor or an international intermediary retains some control, usually to ensure adequate accountability for its effective and responsible use.

This model has many variants and many possibilities for how it could be applied in different country contexts. The transitional model is appropriate for a diversity of country contexts, and offers the opportunity to pursue new ways to strengthen country ownership and systems for accountability over a realistic time horizon (which will differ from one country to another). It takes a pragmatic approach to managing the trade-offs that may exist in the short term as a result of weaknesses in country systems.

Lastly, the ‘full recipient country ownership and accountability model’, which represents an “ideal” that recipient and contributor countries should aim to graduate toward as systems for accountability in developing countries are strengthened. In this model, the recipient country has full ownership of finance, and the contributor fully entrusts the funding it provides to national institutions and national systems.

Decisions on how funding is used are made by national actors, in line with national plans and priorities, albeit within the boundaries of the funding agreement between the two parties (for example, the contributor may provide funding for a particular sector).

Country systems for results management, fiduciary standards, and environmental and social safeguards are used and the recipient country is fully accountable for results. This model is the most appropriate for countries with fairly strong national systems for accountability, or with institutions that can ensure robust accountability mechanisms.
Although the contributor relinquishes control of finance to the recipient country, it maintains some leverage through the ability to discontinue funding if conditions are breached. This is the preferred model of development financing. It is also likely to be highly sustainable in the long run. Namibia is in this category and strictly speaking should apply across the board in all sectors and with all partners.

Decades of evidence with official development assistance show that when support is aligned with country development plans and priorities greater results are attained. Further, when funding is delivered through country institutions and fiduciary systems development efforts can have a much greater impact.

Recent evidence on climate finance landscape also suggests that appropriate national capacities, institutional arrangements, and accountability systems are essential if developing countries are to effectively and transparently deploy finance toward low-carbon, climate-resilient development.

It’s time that development financing institutions and partners let the goals and aspirations of developing countries lead the way, not the fears of the unknown.

There is a need to participate throughout the entire process of programming, from Conception-Implementation-Impact. Remember, development is a multi-directional process (there is a recipient needs and a donor interest) and obligations to act to correct misaligned development actions.

* Benedict Libanda is chief executive officer of the Environmental Investment Fund of Namibia.

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