CDC - Part I - Chapter 1

Part I.
Synthesis of Case Studies

Chapter 1. Introduction

1. Background

Cambodia’s quest for a new paradigm of development cooperation partnerships has been gathering speed in recent years. The Royal Government of Cambodia presented an overall vision of the new partnership paradigm at the Consultative Group (CG) meeting in May 2000, proposing a "paradigm shift" in the current thinking and practices from "Donorship" to "National Ownership."¹Further, the government declared its commitment to moving from Control to Leadership, from mere Coordination to Collaboration, and from Dependency to Sustainability, building on the existing aid coordination and management mechanisms in Cambodia.

The new paradigm comprises five principles to guide actions of the government: (1) a common vision and shared objectives; (2) agreed governance and accountability structures; (3) harmonized strategic management and operational capacities; (4) learning and adaptation capacities; and (5) building and maintaining trust. The government further articulated the new paradigm in 2001, identifying seven strategic considerations for implementing development partnerships in Cambodia (see Box 1-1 for details on the principles and strategic implementation considerations).²

To move forward, the government and donors established the Government-Donor Partnership Working Group (PWG) under the CG mechanism in late 2002. This Working Group examines issues and makes recommendations to strengthen partnerships and reports progress at CG meetings. The Secretary-General of the Cambodia Rehabilitation and Development Board (CRDB) at the Council for the Development of Cambodia (CDC), who is also the Secretary-General of the Inter-Ministerial Steering Committee, serves as the government representative and chairperson of the PWG. The UNDP Representative and the Minister at the Embassy of Japan to Cambodia were designated as co-vice chairs of the PWG.

There are some compelling reasons why a new partnership paradigm needs to be developed and translated into concerted action in Cambodia.

First, the experience of development cooperation (or lack thereof) since late 1980s points to the need for much improved partnership arrangements in Cambodia. In general, development cooperation in Cambodia has been donor-driven, and has paid insufficient attention to Cambodian ownership.³When Cambodia started economic liberalization in late 1980s, multi and bilateral donors used NGOs as substitutes for Cambodian institutions to channel increasing humanitarian assistance to Cambodia. One long-time expert of Cambodia’s development noted that "this served to shift control of reconstruction process and agenda out of Cambodian hands to the donors and aid agencies, and virtually excluded many Cambodians from participation in the process."⁴

After the UN organized general elections in 1993, Cambodia experienced an influx of foreign assistance for its transition to democracy and a market economy until mid 1997. This was the beginning of Cambodia’s heavy dependence on foreign aid, which is still continuing. One expert observer described this post-UNTAC period as "development anarchy," noting "a marked tendency of newly arrived agencies, and most donors, to either assume that Cambodia was without established institutional structures, or to explicitly reject such structures as had been put in place by the State of Cambodia (SOC) as somehow illegitimate or invalid."⁵The new government established under the 1993 Constitution operated in a fragile political environment where former conflicting parties formed a coalition government while the civil war against Khmer Rouge continued along the Thai border. As a result, the government was not fully prepared to take leadership of development cooperation at a time when donors were sending hundreds of missions to Cambodia to develop their projects. Real commitment to coordination among donors did not take root, and many donors have missed opportunities to tap in local knowledge, experiences and institutions that Cambodians in fact had had in the pre-UNTAC period.⁶"Lack of capacity" became donors’ common reference in development dialogues. All these have at least partly contributed to the persistence of unequal development partnerships in Cambodia.

The second reason for the need of a new partnership paradigm is associated with the state reform programs launched recently. Building on the long-awaited peace and more stable political environment, the new coalition government embarked on a series of ambitious state reform programs in 1999. The programs span a broad range of issues, including cross-cutting themes (public finance, civil administration and deconcentration, decentralization, demobilization, legal and judicial reform, anti-corruption, and gender) and sector reforms (e.g., education, health, land, forestry, and fishery).⁷It is recognized that such ambitious reforms require new partnership arrangements with broad participation of stakeholders, including central and local governments, civil society, businesses, and foreign donors. In particular, development cooperation with external partners must be managed better to use limited aid resources effectively and efficiently. It is also well recognized that management of development cooperation has been putting enormous strain on the government’s administration as the volume of foreign assistance has been increasing in recent years.⁸To address these issues, the government has taken an important step forward by creating a number of Reform Councils to coordinate and facilitate reforms since 1999. Donors have responded to the government’s initiative by creating Donor Working Groups as counterparts for respective Reform Councils. These new mechanisms serve as important mechanisms for state reform and development cooperation under the CG process.

Finally, but not the least important, the recent development of the National Poverty Reduction Strategy (NPRS) now provides a viable example for development cooperation in the future.⁹The government has demonstrated commitment to NPRS development, and many stakeholders including many donors have supported this initiative. This presents a new example of development cooperation in which the government takes the initiative and foreign donors support it. The implementation of the NPRS should further strengthen this new dynamic of development cooperation partnerships initiated in the PRSP process. Notably, the NPRS was developed with broad participation of Cambodian stakeholders who had rarely been consulted or heard their voices in the national planning processes in the past. If this practice can be replicated in the implementation phase of NPRS, it will help build national partnerships among the state, civil society and the private sector, and make the nation’s development efforts more effective.

Box 1-1. Cambodia’s New Paradigm for Development Cooperation Partnerships

Cambodia’s New Paradigm consists of 5 principles and 7 strategic implementation considerations in developing effective cooperation partnerships with development partners.

Principles:

A common vision and shared objectives – firmly rooted and based on national and sectoral development objectives, with consensus reached on a mutually agreed set of policy directions, implementation strategies, results and expected outcomes.

Agreed governance and accountability structures – well-articulated roles and responsibilities forming a "shared accountability" where partners would be collectively accountable for the success and operation of the arrangement, operating within well-defined decision making processes and rules where transparency in decision making, operations and access to information are particularly critical.

Harmonized strategic management and operational capacities – the simplification, streamlining and harmonization of operational policies and capacity development practices particularly in the areas of financial management, program/project planning, procurement, audit and evaluation, staffing, information and communication systems, with credible reporting and monitoring that should lead to the development of common or joint program/project evaluation and audit reviews.

Learning and adaptation capacities – Partnerships will be built cautiously and with sufficient flexibility in the arrangements to ensure that each can generate learning and innovation, experiences that can be adapted and replicated across sectors.

Building and maintaining trust – each partner must value the reliability and worth of the arrangement. Having trust means having confidence in one another that each partner will do what they say they will do, and mean what they say. Agreed mechanisms to support accountability, transparency of decision making, information and reporting, audit and evaluation are essential to sustain trust. There must be certain agreed codes of conduct and specific partnership rules of engagement where mutual decisions can be made openly, with clear mechanisms for problem identification and dispute resolution.

Strategic Implementation Considerations:

Ownership, commitment and shared resources – Development partnerships are seen as governing modalities of managed relationships that facilitate the achievement of sectoral and thematic outcomes through coordinated and more formally integrated activities involving multiple projects, sub-programs and supporting activities. It is recognized that within Government there are gaps in the management of capacities and that efforts to build capacities for national execution need to be dealt with openly and in a transparent manner.

Flexible partnership modalities – The choice of development partnership models or approaches would depend on what can best serve the interests of Cambodia. At present, two distinct types of partnerships are envisaged: national partnerships, such as between the State, civil society and private sector; and those partnerships that involve donor countries, international agencies, private sector investors and NGOs.

Starting gradually, getting priorities right and using pilots – The priority and sequencing for pilots that are linked to national development goals and priorities has already been established. The pilot initiatives need to be managed strategically to ensure that lessons learned can be captured and disseminated, and that national capacities are developed and sustained.

Identifying and differentiating partner roles – It is envisaged that the composition of partners will depend on the purpose of the partnership. In development partnerships involving external donors and NGOs, the Lead Partner should, in all instances, be a national organization (this could be a central or local level of government, possibly a national NGO or private sector organization). The role of the External Lead Partner would also vary, depending on comparative advantages and strengths of the partners and the requirements of the partnership. The External Lead Partners should act as a catalyst, facilitator, technical and resource advisor. The role and responsibilities of the External Lead Partner or facilitator are more than just providing resources, it requires building trust, having expertise on the ground to interact with and build the confidence of the sectoral ministries and other donors, and a willingness to be flexible in both the timing and use of whatever resources are available. It is therefore critical and crucial that donors organize and mobilize themselves to optimize the comparative advantages of individual donors. In particular, the major lending agencies should forge stronger relationships with UN agencies and some bilateral agencies.

Developing national (in-country) coordination capacities – The Strategic Management Framework for development partnership must have capacity development as the centerpiece and should focus on national execution of all technical interventions in order to boost national capacity and competencies at local and central levels of the government as well as the civil society and the private sector.

Strengthening external donor capacities for aid management and coordination – there is room for strengthening external donor coordination at the country level. Internal donor policies, practices and procedures also need to be closely examined to ensure that they are supportive of government’s policy thrusts for national ownership, leadership and overall coordination, specifically in the context of developing collaborative partnerships.

Implications for good governance and administrative reform – Reforms in governance and pubic administration are a major part of the solution to a number of existing aid management and coordination problems and issues. Performance and existing capacity constraints within the civil service need to be addressed by both civil service reforms and reforms in services delivery. This will require enlightened management on the part of both the Royal Government and its external partners on how very limited public sector human resources can best be managed in the short-term, and realistically developed over the longer term.

Source: Council for the Development of Cambodia (2002b).

2. Objectives, Scope and Methodology of the Study

The current study is intended to assist Cambodia and its external partners in strengthening further the new paradigm of development cooperation partnerships. This is one of the three studies for this purpose carried out under the Government-Donor Partnership Working Group (PWG) as part of Cambodia CG mechanism.¹⁰

The term "development cooperation" is a broad concept in itself. The current study will focus on "managerial aspects of aid coordination." By emphasizing "management" we will look at development cooperation from the perspective of the institutions and processes under which the government formulates, reviews, and implements programs and projects jointly with external partners. With "aid coordination," our main focus will be on the programs and projects in which two or more donors are involved to mobilize aid resources and develop and support programs jointly so as to maximize the development effectiveness of aid resources.

It should be emphasized that the government and its external partners have been already making commendable efforts to enhance aid coordination in a number of programs and projects. Our study will look at some sectors that have already made notable progress, such as Education and Health. Similarly, important progress in aid coordination has been made in cross-cutting reform themes, such as public finance and local governance. It is expected that in-depth case studies of those good practices would enable us to draw useful lessons that will help strengthen aid coordination management and enhance development partnerships in Cambodia.

Objectives

The objectives of the current study are twofold:

to identify, examine, and draw lessons from existing practices of the government and external partners in jointly formulating, reviewing and implementing programs and projects; and

to make recommendations on (i) approaches and methods that can be adopted for other sectors and cross-cutting issues, and (ii) issues for which feasible solutions can be agreed to and implemented in the short to medium term.

Scope

The current study will review the processes and achievements in two categories of aid coordination management: (1) sector-focused aid coordination; and (2) cross-cutting issue focused aid coordination.

Two case studies have been selected for each category:

Sector-focused aid coordination

Education – Sector-Wide Approach (SWAp)
Health–Sector-Wide management (SWiM) and the Tuberculosis Sub-Sector Program

Cross-cutting issue focused aid coordination

Local Governance—Seila Program¹¹
Public Finance–Technical Cooperation Assistance Program (TCAP)

The four cases were selected on the basis of interviews and discussions with key stakeholders during the scoping mission in February-March 2003. Those stakeholders included a number of public officials, donor agency representatives and technical advisors who provided their views on the cases to be studied. The main criteria for the selection included: (1) the extent to which positive developments on aid coordination management were observed; (2) the involvement of two or more donor agencies in a program; and (3) a reasonable implementation period from which meaningful lessons could be drawn from experience.

In the four cases studied, the government and many partners have taken "program-based approaches," in which they have developed partnership arrangements to manage and coordinate reform programs jointly in the respective sectors and cross-cutting issues. Although their basic concepts and principles may have been originally adopted from elsewhere, the program-based approaches under the case studies have evolved to adapt to the reality in Cambodia.¹²

For each case, the study will examine both the institutions involved in aid coordination, and how aid coordination is managed throughout the program cycle, particularly preparation/planning, implementation, and monitoring/evaluation/review. The study will assess the achievements of aid coordination methods or approaches according to the following criteria:

Local ownership—the extent to which the government takes the lead and makes decisions in initiating, planning, controlling, managing, and reviewing government programs and activities assisted by donors¹³;
Local capacity to manage aid coordination—this includes capacity both at the individual and institutional levels. Individual capacity means that public officials have the skills and experience needed for managing aid coordination effectively. Institutional capacity is the extent to which formal and informal rules and regulations provide incentives for individuals and organizations to manage aid coordination effectively and efficiently. The latter is particularly associated closely with sustainability, which is discussed below.
Overlap of assistance—the extent to which aid coordination mechanisms have contributed to aligning donor-funded projects and as a result, reducing their overlaps for the same activity (e.g., training of a group of officials on the same subject);

Transaction costs to the government—the extent to which the time and money (and opportunity cost) that public officials have to spend on managing donor-funded programs or projects has been reduced; and
Sustainability—the extent to which the government has integrated and institutionalized program and aid coordination management, and can continue this work effectively and efficiently without substantial external assistance. Sustainability is closely linked with capacity development, particularly institutional capacity.

Finally, the current study will pay special attention to some issues that are closely linked to the other two studies--Capacity Development and National Guidelines--carried out under the PWG. The first issue is salary supplements for government officials, which is a subject of the Capacity Development study. Many donor-funded projects in Cambodia provide salary supplements. This has been almost inevitable as an average salary of government officials is far below the subsistence level. Although the grave negative impact of salary supplements on the functioning of the civil service has been recognized, donors have found it difficult to secure reliable government counterparts without the provision of salary supplements. The current study will look at how salary supplements are managed in the cases studied. The second issue is harmonization of aid procedures, which is the subject of the National Guidelines study. This study will report on harmonization efforts that have been undertaken in the cases studied.

Methodology

The set of research instruments employed to carry out this study are: (1) desk reviews of key documents on Cambodia and the literature on development cooperation; (2) interviews with key stakeholders, including senior public officials (decision makers and managers), donor representatives, and technical advisors (both Cambodians and foreigners); and (3) data analysis where relevant and available. Building on the preliminary study in February-March 2003, the first field study was carried out in June-July 2003 in Cambodia. This was followed by the second field study in October-November 2003 in which thematic workshops were held for government officials at the operational level and a field visit to Prey Veng Province was carried out.

Structure of the Report

The remainder of this report is organized as follows. Chapters 2 to 5 of Part I are a synthesis of the four case studies. Chapter 2 will examine mechanisms of aid coordination management from a comparative perspective. The four programs are compared in each program cycle from the viewpoints of institutional arrangements and the implementation processes of aid coordination management. Then Chapter 3 will report the achievements of each program. Chapter 4 draws lessons learned from the four case studies and offers some recommendations for action, and Chapter 5 offers some concluding remarks, looking at the future. Part II provides detailed descriptions of the findings from the four case studies: Chapter 6 on Education, Chapter 7 on Health, Chapter 8 on Local Governance, and Chapter 9 on Public Finance.

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