Learning from Experience with Performance Assessment Frameworks (PAFs) for GBS

1. Learning from Experience with Performance Assessment Frameworks (PAFs) for GBS David Hoole 9 May, 2006

2. Objectives and Methodology • Background: Thematic study under OECD/DAC GBS Evaluation Framework, funded by seco/Switzerland, undertaken by OPM & Gerster Consulting • Objective: Identify early lessons and good practices in development of PAFs based on case studies; not a formal evaluation • Coverage: Selection based on PAF track record, OECD/DAC evaluation coverage, seco priorities, available documentation – Benin, Ghana, Mozambique, Nicaragua, Tanzania • Methodology: Minimal reliance on field work, short missions to Benin and Ghana, others desk work & making use of on-going consultancies. Country studies > comparison > practice identification OPM & Gerster Consulting

3. PAF Approaches Four different types of PAF approach have emerged: • European Commission: multiple response mechanism with fixed and outcome-related variable tranches • IMF: Macroeconomic and structural PRGF conditionality • World Bank: Assessment against prior policy actions • Bilateral agencies: Assessment against overall progress in PRS implementation In the case study countries a mixture of these approaches can be observed. OPM & Gerster Consulting

4. Good practices • One single harmonised PAF for a multitude of donors is feasible, leading to reduced transactions costs • A common schedule for planning, review, decisions, disbursements is possible and improves predictability • A significant alignment to Government procedures is achievable, strengthening domestic accountability • The PAF approach is applicable to donors’ obligations and offers up new ways to strengthen mutual accountability • The PRGF is an example of how elements of overall performance assessment can be effectively ‘sub-contracted’ to a parallel process OPM & Gerster Consulting

5. Caveats • There is a tendency to expand the scope and complexity of the PAF. This undermines the focus on a clear set of reform actions and jeopardises the effectiveness of GBS operations • There is need to recognise that PAFs should be only one element within a range of processes for performance review and dialogue. Essentially, PAFs have become too big because GBS donors are trying to achieve too many objectives through this one instrument. • The inclusion of variable tranches has generated a useful debate over indicators and outcome targets. However, the incentive effects of variable tranches are unlikely to be generated where (1) variable tranches are relatively small (2) a wide range of disbursement conditionalities is being assessed OPM & Gerster Consulting

6. Reflections • Greater clarity over the particular objectives of GBS would help address trade-offs in the management of GBS - ownership vs fiduciary concerns - predictability vs performance orientation. • What should be the use of conditionality? – Two rationales identified: adherence to due process conditions and implementation of policies and reforms needed to meet PRS objectives. • Given its potential positive effects, how best to introduce a graduated response? Different types of variable tranche are possible. Greater consideration of which option is likely to be the most effective in a particular context is desirable. • What should be the role of the PAF? Several roles were observed. Emphasis should be on the central objectives of supporting the assessment of commitments made in relation to GBS and acting as a focal point for policy dialogue. OPM & Gerster Consulting