Conditionality VS Ownership:
A resolvable paradox?
Cairo, 19 January 2008
President Amadou Toumani
Toure of Mali, Development
Cooperation Forum 2005
“True partnership supposes autonomy of
beneficiary countries in requesting aid and
in determining its objectives… Often
programs are imposed on us, and we are
told it is our program…People who have
never seen cotton come to give us lessons
on cotton… No one can respect the
conditionalities of certain donors. They
are so complicated that they themselves
have difficulty getting us to understand
them. This is not a partnership. This is a
master relating to his student.”
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World Bank Conditionality
Review, 2005
“Traditional conditionality has
often been judged as overly and
increasingly intrusive, infringing
national sovereignty (Drazen
2002), undermining domestic
democratic process and
institutions (Stiglitz 1999), and
ineffective in bringing about the
desired outcomes (Easterly
2005)”
“Traditional conditionality
in policy-based lending
has often been criticized
as being ineffective and
intrusive”
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“Policy conditionality…is both an
infringement on sovereignty and
ineffective”
Africa Commission, 2005
World Bank and IMF Conditionality reviews:
In 2002, IMF Conditionality Guidelines
- In 2005, WB Good Practice Principles for the application of
conditionality
-
Main objectives:
Streamline conditionality;
- Apply the principles of ownership, harmonisation, criticality,
customisation, and transparency.
-
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World Bank: KEY FACTS
Eurodad’s research published in November 2007:
On average, each WB operation still contains 37 conditions
- 71% of the WB operations still attach conditions containing sensitive
policy reforms, such as privatisation and liberalisation
-
8%
25%
25%
42%
Economic policy
Public sector reform
Human and social development
Environment, rural and urban development
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IMF: KEY FACTS
IMF Independent Evaluation Office 2007 reports:
Number of structural conditions per operation unchanged;
- IMF conditions are not critical;
- Sectors:
- privatisation and liberalisation of the financial and banking sector;
- reforms of the fiscal systems;
- Almost one fifth of the conditions are privatisation and
liberalisation conditions.
- Quantitative conditionality still overly stringent and undermining
economic growth.
-
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Mapping out
the brave ones
Conditionality-friendless donors:
-
Norway, 2006: Soria Moria Declaration on International Policy
-
UK, 2006: White Paper “Eliminating World Poverty”
Germany, the Netherlands, Italy: not quite there yet, but on their
way…
-
-
European Commission
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The EC’s shift to outcomebased conditionality
“Drawing on lessons from
previous structural adjustment
programmes and the recognition
of the central importance of
ownership, the European
Commission has moved to an
approach based on linking
their aid to poverty reduction
results”, EC Budget Support: An
Innovative Approach to
Conditionality.
Country
Sector
Outcome
indicator
Burkina Faso
ABRP 200508
Health
% children
vaccinated
Mozambique
PRBSP III
2006-07
Education
% completion
rate – girls
Tanzania
PRBS III
2006-08
Education
% primary
school
enrolment
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EC expectations for
outcome-based
conditionality
- Encourage a focus on results by using indicators of
service delivery / poverty reduction;
Protect the political space for governments to
determine
policy;
-
-
Streamline conditionality;
-
Promote domestic accountability;
- Stimulate demand for quality data on poverty.
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Policy and results: logics
compared
Policy actions in programmes
Outcomes in
programmes
World Bank
Burkina Faso PRSC 7:
- Alignment to international market price
- Contracts with professional operators
to manage water systems
Tanzania PRSC 5:
-Reform of business activities
registration
Burkina Faso PRSC 7:
- SOFITEX operating profit at
$US Million (>0)
- Access to drinking water %
Tanzania PRSC 5:
- Ranking on “Doing
Business”
European
Commission
No policy conditions are used to spell out
the actions that the government should
undertake to achieve a particular outcome
Mozambique PRBSP III:
- Primary school enrolment
rate
- Completion rate
- Proportion of institutional
deliveries among expected
births
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What has been the
impact of outcome-based
conditionality?
Positive effects:
Outcome-based conditionality has pushed a results
based approach;
- It has managed to streamline conditions;
-
But real concerns remain on attribution, predictability, etc.
Can further potential be unleashed?
- Improve process (including CSO participation)
- Improve indicators (including choice of)
- Improve collection and disclosure of data
- Revise technical complexities and mechanistic approach
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How to put governments
in the driver’s seat – and
yet feel safe
Guiding principles to resolve the conditionality – ownership
paradox:
Conditionality should be only applied in cases where none of
key stakeholders could reasonably object to;
-
Agreed standards and obligations should aim at increasing
national leadership and policy space;
-
Mutual accountability has the potential of framing donorrecipient relationships in ways that could yield much better
results.
-
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Recommendations for
donors to Accra and
Doha
1.
Agree on policies to eliminate economic policy conditions;
2.
Put pressure on the Bank and the Fund to streamline their
conditionality and phase out economic policy conditions
1.
2.
Set a target in the Paris Declaration on Aid Effectiveness and the
IMF and WB conditionality reviews
Set up an independent monitoring system to objectively assess
progress made by the World Bank in the application of the GPPs
3.
De-link their allocation and disbursement decisions from the
IMF macro-economic assessments
4.
Limit their conditions strictly to due process obligations and respect
for internationally recognised standards and development goals.
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By Nuria Molina-Gallart
EURODAD
nmolina@eurodad.org
www.eurodad.org
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