How can donors work together to increase the chances of aid achieving poverty reduction? The World Bank and Nordic agencies have enthusiastically promoted Sector-Wide Approaches (SWAPs) to coordinate development assistance. Can SWAPs improve the chances of reaching the ambitious International Development Goals target of halving poverty by 2015?

A study by Oxford Policy Management asks, why have sector investment programmes (SIPs) in Ethiopia, Ghana, Mozambique, Uganda and Zambia not fulfilled their early promise? It was thought SIPs would spread across Africa and transform initiatives in health, education, agriculture, transport and energy. A few years on, what have we learnt?

SIPs emerged in the context of the success of the World Bank’s adjustment agenda in Africa. The Road Maintenance Initiative (RMI), a coordinated donor attempt to support road building and involving a range of stakeholders in making decisions, shaped SIP thinking. Lessons learnt from the RMI experience were developed by the Bank into a SIP model with six essential features. SIPs should be:

• sector-wide and cover current and capital expenditure
• based on a clear agreed sector strategy and mechanisms to ensure expenditures are allocated to agreed priorities
• locally-owned and managed by a coalition of government, beneficiary and private sector stakeholders
• formally approved by donors who pledge to phase out activities not consistent with SIPs
• implemented through the same set of planning, budgeting, procurement, monitoring and technical assistance processes
• supportive of local capacity and use of local consultants rather than external technical assistance providers.

Among the findings are:

• Without an overall framework defining public expenditure, SIPs potentially encourage fungibility (diversionary expenditure) of funds.
• SIPs in agriculture have been bedeviled by disagreements on the role of the state in providing extension services.
• The Bank has deployed its traditional formulaic approach to stakeholder consultation and has not tried to win over the recalcitrant or to consult the poor.
• The drive towards sector programming is in conflict with other donor initiatives to encourage decentralisation of decision-making and public expenditure.
• Line ministries have seen SIPs as a way of escaping constraints imposed by finance ministries.
• SIPS have not necessarily reduced transaction costs of aid but have instead often created parallel systems outside normal government planning and budget systems.

The report urges donors to stop being starry-eyed. SIPs should be seen as a long-term ideal. New SIPs should not be set up:

• until government management and policy capacity has first been strengthened
• without assessing the SIP’s financial sustainability within the context of a government’s total public expenditure
• without first ensuring that there really is donor-government consensus regarding sectoral priorities.

Source(s):
‘Increasing aid effectiveness in Africa: The World Bank and sector investment programmes’ by Stephen Jones Full document.
‘Increasing aid effectiveness in Africa: The World Bank and sector investment programmes’ by Stephen Jones in 'The World Bank: Structure and Policies', Cambridge University Press edited by C. L. Gilbert and D. Vines (2000)

id21 Research Highlight: 20 June 2001

Further Information:
Stephen Jones
Oxford Policy Management
38 St Aldates
Oxford OX1 1BN
UK

Tel: +44 (0)1865 207300
Fax: +44 (0)1865 250580
Contact the contributor: admin@opml.co.uk

Oxford Policy Management, UK

Other related links:
The International Development Goals sets targets for poverty reduction

The World Bank has promoted SWAPs to coordinate development assistance

'Strengthening policy reform by addressing the needs, interests and rights of poor and vulnerable people'

The Development Assistance Committee's work is related to aid cooperation

Eldis highlights Aid

UNDP focuses on Poverty