DIR: Institutional Assessment of the Paris Declaration
- Recipe for Poverty Reduction in Ghana: Master Thesis June 2008 – Shani Mahama
Table of Contents
Tables and Charts
Acknowledgements
Résumé
List of Abbreviations
Epilogue:
1.0 Introduction
1.0.1Problem Formulation
1.0.2 Research Question
1.0.3 Conceptual Clarifications
1.0.3.1 Sustainable Poverty Reduction
1.0.3.2 Governance
1.0.3.2 Capabilities......
1.0.3.3 Civil Society
1.0.3.4 Economic Development
2.0 Methodology
2.0.1 Case Study and Research Design
2.0.2 Data Sources
2.0.3 Reliability and Validity
2.0.4 Theoretical Reflections
2.0.5 Rationale for the Study
3.0 International Development Aid
3.0.1 Moral Obligations
3.0.2 Development Goals
3.0.3 Development Strategies
3.0.4 Aid Scale and Distribution of Aid
3.1 The Paris Declaration
3.1.0 Strategy for Aid Implementation
3.2.0 Principles of the Paris Declaration
3.2.1 Ownership
3.2.2 Alignment
3.2.3 Harmonisation
3.2.4 Managing for Results
3.2.5 Mutual Accountability
3.3.0 Indicators, Targets and Timetables
3.3.0.1Reflection over Paris Declaration
3.4.0 Brief History of Ghana
3.4.0.1 The Political Economic Context
3.5.0 Civil Society Organisations in Ghana
3.5.1 NGOs in Ghana
3.5.2 The Ghana Joint Assistance Strategy (G-JAS)
3.5.3 Challenges of the G-JAS
3.5.4 Major Findings on Implementation Process
3.5.5 Criticisms of the GPRS
4.0 Theoretical Framework
4.1Neo Intuitionalism
4.1.1 Normative Institutionalism
4.1.2 Normative Institutional Changes
4.2 Historical Institutionalism
4.2.1 Changes in Historical Institutionalism
4.3 Sociological Institutionalism
4.3.1 Institutional Environment
4.5 Social Capital
4.5.2 Institutional Perspectives on Governance
5.0 Analytical Framework
5.0.1Analytical Indicators
5.1 Institutionalising Donor Harmonisation
5.2 Alignment of Development Aid
5.2.0 Recommendations
5.2.1 Civil Society in Alignment Process
5.2.3 Value-for-the Money through Alignment
5.3 Ownership of the Development Aid
5.3.1 How Aid Ownership!
5.4 Mutual Accountability amongst Actors
5.5 Managing Aid for Results
5.6 Reflection over the Analysis
6.0 Conclusion
Bibliography
Tables and Charts
Figure No. / Title1 / 10 Most Aid Recipient Countries in Africa
2 / Actor Interactions
3 / Actor Complementarity and Variable Chain
4 / Development Goals of Foreign Aid
5 / Real Aid Trend and Gleneagles G8 Pledges
6 / ODA Aid Flow
7 / DAC Country Aid Donations
8 / Paris Declaration’s principles and Actor Pyramid
9 / Paris Declaration’s Monitoring Indicators
10 / Composition of Development Aid to Ghana: 1997-2006
11 / Baseline Study Results in Ghana
12 / Macro-Micro Governance
13 / Visual Chart of the Analytical Indicators
Acknowledgements
My sincerest appreciation goes to my dearest wife, Ulla M. Jepsen for her immeasurable support throughout my study at AalborgUniversity. Without her support much of what I have accomplished would not have been possible. My daughter Pumaia Isabella M. Jepsen and my little son Sigli Andreas M Jepsen deserve my sincere acknowledgments. My precious time had to be divided between these wonderful children and my academic work even though committing all my time and attention would not have been enough to give these children love and care to usher them into this challenging world.
I owe a mammoth thanks to my dearest parents for investing in my education (which in Ghanaian context is a privilege and not a right). They have had to forgo important personal financial obligations and luxuries to give me this gift that will forever remain a legacy for me, my family and any society that, I shall relate to.My in-laws – Kirsten and Henning Jepsen and the entire family have supported me in ways that words can not describe and for this, I ask for the blessing and mercy of God upon them.
All the entire organisation of Aalborg University, especially Department of Politics & Administration and DIRES, my fellow students who supported and constructively criticised my works in diverse ways to reach this point of my academic life, the Danish Government and people of Denmark for making it possible for me to get free education in Denmark, I say thank you. Finally, I thank Ghana Venskabsgrupperne for providing me an avenue through their organisation to have first hand experience of development policies and practice relevant for my study.
Finally, I specially thank Professor Mammo Muchie (My supervisor) for his support and wisdom.
Shani Mahama
June 2008
Résumé
This study assesses the institutional capacity of the current aid architecture from a multi-dimensional and neo institutional perspective. It undertakes an assessment of state-donor and state-civil society interactions as agreed under the Paris Declaration. The MDGs instituted by the UN is six years away and NO single state in SSA is in the path of achieving any of the Goals. The Paris Declaration is a modality to fast track and guides the process of achieving aid effectiveness – disbursement and implementation – to meet especially the Goal number One (MDG1) that seeks to reduce hunger and poverty. As much as the Paris Declaration is a relevant policy document, actors must adopt best practices including a complementary bottom up and rights based approach in the implementation process, if sustainable development is to be achieved. Even though the study is not a blue print, it howeverseeks to interpret and rationalise through existing documents and thereby come with new knowledge for policy recommendations relevant in Ghanaian context.
The principles of the Paris Declaration are idealistic and generally technical terms that need operationalisation and reconceptualisation in their applicability in Ghanaian context. The study shows that Ghana has instrumental institutional frameworks and structures, but these have to be made contextually contingent and owned in the best interest of Ghana and not for donors. The GPRS II is infiltrated by donor prescriptions and thereby not optimally able to effectively reduce poverty in Ghana. Ghana needs to develop her own policies that shall guide her negotiations with donors.
The role of civil society in policy deliberations remains marginal, but their presence is not jeopardised by the policy shift by donors towards state institutions (MDBS) as suggested by CSOs. Poverty reduction will become sustainable when CSOs become integral part of the donor-state interactions. This will legitimise state actions, donor trust, ensure value for the money and thereby sustainable poverty reduction strategies.
Key Words
Paris Declaration, macro and micro actors, partner governments/ recipient states, state institutional structures, institutionalism, social capital, norms, routines, civil CSOs, NGOs, poverty reduction strategies, harmonisation, alignment, ownership, mutual accountability, aid effectiveness, sustainable development, international cooperation, globalisation, bilateralism, multilateralism, corruption, rights based approach, grassroots participation, Millennium Development Goals (MDGs), United Nations (UN), Sub Saharan Africa (SSA).
List of Abbreviations
AI / Appreciative InquiryACP / Africa Caribbean and Pacific
AFRODAD / African Forum & Network on Debt & Development
AG / Advisory Group
AGOA / Africa Growth and Opportunity Act
APRM / Africa Peer Review Mechanism
AU / African Union
CBO / Community Based Organisation(s)
CDD / Centre For Democratic Development
CDF / Comprehensive Development Framework
CG/APR / Consultative Group/ annual partnership Meeting
CHRAJ / Commission on Human Rights and Administrative Justice
CIDA / Canadian International Development Assistance
CJA / Committee for Joint Action
CPI / Corruption Perception Index
CSO / Civil Society organisation(s)
CIVISOC / Civil Society Coordinating Council
DA / District Assemblies
DANIDA / Danish International Development Agency
DAC / Development Assistance Committee
DBS / Direct Budget Support
DCE / District Chief Executive
DfID / Department for International Development
DP / Development Partners
EBA / Everything but Arms
ERP / Economic Recovery Programme
EURODAD / European Network on Debt and Development
FDI / Foreign Direct Investment
EURODAD / European Network on Debt and Development
GAD / Gender and Development
GAPVOD / Ghana Association of Voluntary organisations and Development
GBS / General Budget Support
GoG / Government of Ghana
GNP / Gross National Product
GNP / Gross National Income
G8 / Group of Eight
GPRS / Growth and Poverty Reduction Strategy
G-JAS / Ghana Joint Assistance Strategy
GLSS / Ghana Living Standard Survey
GNAFF / Ghana national Association of Farmers and Fishermen
GNAT / Ghana National Association of Teachers
G-HAP / Ghana Harmonisation Action Programme
GTZ / German Development Cooperation
HIV/AIDS / Human Deficiency Syndrome/ Acquired Immune Deficiency Syndrome
HIPC / Heavily Indebted Poor Countries
IDA / International Development Assistance
IMF / International Monetary Fund
IFI / International Financial Institute
JICA/TICAD / Japanese International Development Assistance/ Tokyo International Conference on African Development
LEAP / Livelihood Empowerment against Poverty
LGSA / Local Governance Service Act
MA / Municipal Assembly or Metropolitan Assembly
MAP / Millennium Africa Programme
MASLOC / Micro Credit Scheme and Small Loans
MCA / Millennium Challenge Account
MCE / Municipal Chief Executive
MDG / Millennium Development Goal(s)
MDBS / Multi Donor Budget Support
MER / Monitoring Evaluation and Reporting
MoFEP / Ministry of Finance and Economic Planning
NDC / National Democratic Congress
NDPC / National Development Planning Commission
NEPAD / New Partnership for Africa Development
NGO / Non Governmental Organisation
NSPS / National Social Protection Strategy
OBA / Output Based Approach
ODA / Overseas Development Assistance
ODI / Overseas Development Institute
OECD / Organisation for Economic Cooperation and Development
PNDC / Provisional National Defence Council
PRSP / Poverty Reduction Strategy Paper(s)
PBA / Programme Based Approach
PIU / Parallel Implementation Units
RBA / Rights Based Approach
RBM / Results Based Monitoring
SAP / Structural Adjustment Programme
SAPRI / Structural Adjustment Programme Review Initiative
SSA / Sub Saharan Africa
SEND Foundation / Social Enterprising Network Development Foundation
SFO / Serious fraud Office
SWAP / Sector Wide Approach
TUC / Trade Union Congress
UN / United Nations
UNCTAD / United Nations Conference on trade and Development
UNICEF / United Nations
UNDP / United Nations Development Programme
UNIDO / United Nations Industrial Development organisation
USA / United States of America
WID / Women in Development
Epilogue:
“Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, and Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need. As absurd as it may sound: Development aid is one of the reasons for Africa's problems. If the West were to cancel these payments, normal Africans wouldn't even notice. Only the functionaries would be hard hit. This is why they maintain that the world would stop turning without this development aid.”
By Shikwati James (Kenyan Economic Expert
Interview by Spiegel (July 4, 2005)
1
DIR: Institutional Assessment of the Paris Declaration
- Recipe for Poverty Reduction in Ghana: Master Thesis June 2008 – Shani Mahama
1.0 Introduction
The Millennium Development Goals[1] (MDGs) achievable by 2015 climaxed the United Nation’s (UN)efforts at setting milestones towards achieving a justified world through poverty reduction. The Danish Government acknowledged that; “Globalisation has changed the world significantly in recent years. Global prosperity has never been greater, yet at the same time global cohesion has come under steady increasing pressure from the world’s inequality” (Danida 2006: 4) The MDGs agreement isa blueprint agreed upon by allcountries and leading development institutionsglobally tostimulate unprecedented efforts to meet the needs of the world’s poorest.
In 2005, over 100 countries and organisations met in Paris to find modalities of achieving effective aid implementation. The output of the summit is termed as the Paris Declaration, serving as a policy action plan to mitigate global poverty concerns through aid effectiveness. Presently, development aid strategies and goals are still being changed; the MDG1(poverty reduction) and general aid effectivenessis aimed achievable through theParis Declaration, agreed uponby a large number of countries and international organisations to make aid effective through five set of principles of ownership, alignment, harmonisation, managing for results and mutual accountability(Paris Declaration 2005). TheParis Declaration seeks to ensure reductions in transaction costs and ultimately effectiveness, efficiencyof development aid towards poverty reduction. Increases in the scale of development aid flows, ensuring effective aid management and governance embodying donor-recipient interactions as well as inclusion of civil society organisations (CSOs) as important actors in implementing development aid (Paris Declaration 2005). Multi Donor Budget Support (MDBS) and decentralisation of aid managementare two key instruments to facilitate the implementation of the Paris Declaration (Andersen & Therkildsen 2007).
A flash-back on development aid timeline will create the understanding and dynamism that has characterised development aid. This is relevant for understanding the current development architecture. United States’ Marshall Plan after the World War II (WWII) marks as important landmark of development aid. The earliest comprehensive policy framework called the Act for International Development was designed by the foreign minister, George C. Marshall in 1947 under the President Truman Regime (1945-1953). (Martinussen 2003: 8). The Marshall Plan targeted European countries’ economic reconstruction after the devastation of WWII. US’ interest in strengthening Western European countries against the expansion of communism and ultimately also the benefits of reconstruction of free Europe for American businesses was not a hidden agenda (Ibid 8). Donor interest and motives for aid has become central to development politics. Germany until the 1980s tied aid to security related motives whilst Great Britain and France had relatively altruistic and humanitarian motives due to their colonial affiliations to former colonies (Ibid 8ff). The current development aid practices, across the world, have similar tendencies of tying aid to certain motives and priorities.
Development goals have also changed over time, ranging from poverty eradication, women and gender equality, democratisation and good governance, human development and private sector growth, institutional development and general empowerment mechanisms. Democratisations as a development goal is characterised by the perception of democracy by major donors as both means for developmentandan end in itself(Rakner, Lise 2007: 1). There is a broad consensus amongst policy makers and academia on the essentiality of good governance as a prerequisite for effectiveness of development aid (ibid). The methods and strategies used to achieve these goals have had varied dimensions and continue to change. Notably amongst the various strategies are; the 1960s trickle-down policy championed mainly by the Bretton Woods’[2] Institutions and liberal economies such as the USA, Great Britain and France. They believed that modern technology and organisational forms would trickle-down and spread like modernisation rings in water to the surrounding traditional society[3]. Another strategy was integrated rural development and the fulfilments of basic needs in the 1970s. Poor people were noted as a productive force that should be utilised to improve economic development by focusing on large parts of the local economy, especially small scale farmers. At this point CSOs especially NGOs become central actors in foreign aid and less focus on the states – third world states were “rolled back” from the production sector (Ibid: 45; Baylis & Smith 2005:650). A major shift in development strategy was in the 1980s where the Structural Adjustment Programmes (SAP) championed by again the Bretton Woods Institutional and neo-liberal economic policies of “rolling back the state” to ensure orderliness in the macro-economic policies (Ibid;Pratt, Brian 2006, Martinussen, 1997).
The focus of the thesis is to study the international aid systems by specifically analysing the relationship between donors, state actors and CSOsinvolved in implementation of poverty reduction strategies and the institutional mechanisms necessary to make the process of poverty reduction (MDG1) sustainable in Ghana. The Ghanaian and international developmentdiscourse is asserted (Pratt, Brian 2006) to be under-going a discursive shift from NGOs being central actors in development implementation – at least under the SAP regime - to a new form of aid flowchannelling development aid through harmonisation and budget support implemented mainly by state actors as the engine of development.It will be important to ascertain, if any, the change experienced as a result of Paris Declaration towards the role ofCSOs/NGOs in development implementation as long as funding, policy consultations and accountability are concerned[4]. NGOs role in development implementation became central due to their perceived comparative advantage and also a growing scepticism especially by neo-liberal economies such as the USA towards states in the Third World(John Martinussen 2003: 157).
Chronologically, the study begins with the introduction by the presentation of the development aid trajectory since WWII.Chapter two embodymethodology and major methodological reflections onhow the research is carried out, chapter three covers the descriptive and empirical background information on the various components and historical reflection of development aid. Chapter threecontains the presentation of Ghanaian political economy and the tenets of the Paris Declaration. This seeks to present the Declaration’s implementation in Ghanathrough the Growth and Poverty Reduction Strategy (GPRS)[5] IIguided by agreements between DPs contained in the Ghana Joint Assistance Strategy (G-JAS)[6]. Chapter fourcoversthe theoretical presentation, of neo institutionalism and governance.The analysis in chapter five seeks to relate theory to practice and actors involved. The concluding chapter summarises the major findings and recommendations. The conclusion is not to be definitive, but will mainly be evaluative, critical perspectives and recommendations on policies that will presumably ensure effective implementation of the Paris Declaration towards poverty reduction.As much as the Paris Declaration paves the way for implementing development aid effectively, it does not represent the panacea for poverty reduction in Ghanaand due to the emerging challenges that characterise the processon issues of governance, power relations and poverty reduction strategic priorities in particular.
1.0.1Problem Formulation
Ghana is one of the heavily aid dependent countries in Africa and has become a “donor darling”.[7]However, being a donor darling has various challenges attached to it. The obvious implication is the constant influence and scrutiny by donors on state policy formulation and implementation that affects aid ownership and impact negatively.