This chapter examines the achievements of aid coordination from the aspects of (1) local ownership, (2) capacity development, (3) overlaps of assistance, (4) transaction costs to the government, and (5) sustainability. A working hypothesis here is that improved aid coordination has a positive impact on the five aspects above and, as a result, on overall development outcomes and objectives. Thus, assessing what has been achieved in the cases studied will be useful in drawing lessons and making recommendations for action toward improving aid coordination management in Cambodia, which is the subject of Chapter 4.

The information analyzed here and in the next chapter has been gathered from a review of the literature and field interviews. The latter collected the views and opinions of informed senior government officials (e.g., secretary of state, secretary general) and government officials at the operational level (e.g., director, deputy director, division chief), donor representatives and technical advisors (see Annex 1 for the list of interviewees). The interviews were semi-structured in that a guiding questionnaire was used for the interviews, but flexibility was allowed to identify and elaborate related issues that interviewees felt important. The information gathered was intended to be qualitative and informants were selected purposely.

"Local ownership" in the current study is defined as "the extent to which the government takes leadership and make decisions for initiating, planning, managing, and reviewing government programs and activities assisted by donors." Table 3-1 summarizes the main findings.

The introduction of program approaches with sector-wide scope has enhanced government commitment to reforms in both the education and health sectors. Key informants agreed that top senior officials–the levels of minister, secretaries of state, undersecretaries of state, and director generals–participated in donor meetings regularly and were actively involved in policy discussions in Education SWAp and Health SWiM. This clearly indicates that MOEYS and MOH are committed to the sector-wide programs introduced a few years ago. Another indication of ownership is that HSP was developed by participation of all departments at MOH and many officials at the operational level.

Some changes of attitude also demonstrate enhanced confidence and leadership. For example, an observer noted that, when the delay in PAP disbursements became clear, MOEYS officials acknowledged the problem and took action to address it, although this problem has not been fully resolved yet. Also, MOEYS increasingly insists the donors align their assistance to the ministry’s plan and strategy, and is now willing to direct and supervise foreign advisors with confidence. In TCAP, the Program Manager and the national expert team have been playing a critical role in program management, and taking the initiative to coordinate the various departments and donor agencies involved.

The government’s increased financial commitment is a direct indication of ownership enhancement. The share and amount of the national budget allocated to the education and health sector has expanded considerably in the last few years. Also, the government has steadily increased the allocation of national budget to Seila Program since its establishment in 1996. Starting from five provinces in 1996, Seila has been expanded to cover all provinces and municipalities in 2003.

A shift of managerial authority over donor funds to the government may also indicate enhancement of local ownership. For example, in Seila Program, the authority to sign partnership agreements with donors was transferred from a donor agency to the representatives of the government.

"Capacity" can refer to both individual and institutional capacity; however, this section focuses on the former. "Individual capacity" means that public officials have the skills and experience needed to manage programs and coordinate external assistance effectively and efficiently. Table 3-2 summarizes our main findings.

As Table 3-2 shows, there are some clear indications that individual capacity has been enhanced in all the cases studied. In Education and Health, for example, preparation of a sector policy and strategy documents with donors provided an excellent opportunity for the government officials who participated to gain skills and experience. The types of the skills gained were: (1) leading discussions of working groups meetings in which foreign advisors also participated, (2) negotiating with donors, and (3) drafting reports in English. TCAP manager also gained skills to manage donor-funded program through the experience at each program cycle.

Seila’s experience, which is longer than the other cases, presents clearer indications of capacity enhancement. According to available data, the number of foreign advisors worked for Seila Task Force Secretariat (national level) decreased significantly from 40 in 1996-2000 to 6 in 2001, while the number of Cambodian officials increased from less than 5 to 30 during the same period. This localization of the program was undertaken during a time in which Seila’s geographical coverage expanded from 5 to 12 provinces. Seila is now managed by around 1,480 Cambodian officials at the provincial and district levels, in addition to the STF Secretariat staff at the national level. Furthermore, an increasing number of donors are willing to pledge funds for Seila to deliver services and infrastructure to local communities. This clearly indicates that Cambodian officials at Seila have significantly improved the effectiveness and efficiency of their work.

The above evidence clearly supports the advantage of in-country, on-the-job training over conventional class-room teaching in enhancing the capacity of government officials. In all the cases studied, officials were fully engaged in their work at their own ministries or government agencies attached during the course of program activities. It is also important to note that these were high profile programs to which top leaders at the ministries had made a strong commitment. This presumably created a strong incentive for officials to develop their capacity in order to be able to deliver the outcomes top leaders desired.

Better aid coordination is expected to reduce overlaps of external assistance in the cases studied. Our findings are summarized in Table 3-3.

Development of a comprehensive database of donor assistance. The availability of accurate information about donor assistance is one of the prerequisites for reducing overlaps. Unfortunately Cambodia’s performance in this regard has been far from satisfactory and, as many have already pointed out, there is a large scope for improvement. The good news is that important progress is already being made. In the process of ESP/ESSP, the MOEYS has developed a comprehensive list of donor interventions and a Common Policy Implementation Matrix. It has also begun developing and using the fairly comprehensive database (AID Management Information System) with support from CDC to monitor assistance trends, both in the past and the future. These have enabled MOEYS and donor partners to make informed decision about planning and monitoring donor assistance, and have decreased redundancy. MOH is also in the process of compiling a comprehensive database of donor assistance in the health sector with technical assistance from the CDC.

Increased information sharing among donors. As we discussed in Chapter 2, all the programs studied held formal or informal meetings among donor representatives and/or technical advisors. The ESWG in Education, Health Sector Partners Meetings in Health, and Seila Forum were formally established and are functional. Informal meetings of advisors in Health TB Sub-Sector were reportedly helpful in avoiding overlaps. TCAP has eliminated overlaps through consultation and information sharing at the planning and implementation stages of the program. Its monthly technical meetings with participation of all department representatives and advisors helped to exchange information and coordinate activities. Also, the Fiscal Reform Working Group meetings contributed to information sharing and reducing overlaps with larger groups of donors assisting public finance reform. All of these good practices clearly indicate that enhancing information sharing among donors helps adjust their interventions to make them complementary and reduce overlaps.

"Transaction costs to the government" are defined in this study as the time and money (and opportunity costs) that public officials have to spend on managing donor-funded programs or projects. Our case studies have found some evidences of reducing transaction costs in Education SWAp and Local Governance Seila, but in the other cases it is not clear whether transaction costs have been reduced as a result of the introduction of those programs.

It should however be noted that the reduction of transaction costs to the government has not been without cost. Many donor informants reported that the transaction costs of donors have increased significantly as donors have had to spend more time and resources for negotiation with other donors. In a sense, the coordination mechanism created under Education SWAp has shifted part of the transaction costs from the government to donors. This has obvious implications for the operation of the country offices of donor agencies, and points to the need for discussion about ways to address the increased transaction costs to donors.

Seila has developed the Provincial Investment Fund (PIF) and the Commune/Sangkat Fund (CSF), which are financed by national budget and external assistance, to deliver infrastructure and services at the local level. It has also created a common local planning, implementation and monitoring and evaluation system for provincial authorities and commune councils to manage those funds. These Seila systems have been adopted by all provinces and communes in Cambodia by 2003. This implies that all provinces and communes can use a common system for managing PIF and CSF through which funding from participating donors are channeled. Transaction costs to provincial authorities and commune councils would have been higher if they have had to manage donor funds separately.

The ultimate concern is whether and to what extent aid coordination has enhanced the impact of program activities and whether this impact can be sustained over time. It is, however, difficult to distinguish the contribution of aid coordination from that of various other factors. Therefore, our study focuses on the "sustainability" of aid coordination activities themselves, i.e., the extent to which the government has institutionalized mechanisms of aid coordination management in its system and can continue the work effectively and efficiently without donor assistance. The assumption is that if aid coordination activities are sustained, then it is more likely that the impact of the program will be sustained over time.

Table 3-4 summarizes the main findings about sustainability. It is perhaps premature to assess the sustainability of the programs studied because they have only been operating for a few years, with the exception of the Seila Program which has been running for eight years now. However, some preliminary assessments could be made for each case studied.

In Education and Health, the development of sector policy and strategy (ESP/ESSP in Education and HSP in Health) and the joint sector review processes have contributed to enhancing the institutional capacity of MOEYS and MOH to manage sector-wide program activities and aid coordination under the programs. In addition, human resource capacity at both ministries has also been enhanced, as was discussed in Section 2 in this chapter. Thus both ministries have made a good start towards better sustainability. However, they also face several challenges that need to be addressed, as is discussed in detail in Chapter 4. Those challenges include, but are not limited to, the strengthening of capacity for public financial management and for planning at the national and local levels (Education), and the strengthening of systems to collect donor assistance information, the capacity to implement HSP at the national and local levels, and the coordination with national programs (Health). Whether or not the activities and aid coordination initiated under the programs would be sustained depends critically on the extent to which those challenges are addressed in the short to medium term.

In the case of the Seila program, there is clear evidence that indicate that the mechanisms for aid coordination are sustainable. As was already mentioned, the government has steadily increased its budget allocation to the program over time and has expanded the geographic coverage of Seila to the whole country. In addition, the localization of the STF Secretariat has been carefully planned and implemented by reducing the number of foreign advisors and increasing Cambodian staff. Furthermore, the authority to manage donor funds has been handed over from foreign to Cambodian hands. Finally, recognizing the value of the local management system that Seila has developed, an increasing number of donors have decided to channel their donor funds through the Seila program. All the above evidence clearly indicates that Seila’s aid coordination mechanisms are sustainable and that aid coordination has helped enhance Seila’s sustainability significantly in the last eight years.

In TCAP, the MEF (particularly concerned staff) has gained experience in managing a program approach to capacity building and aid coordination through TCAP. There is evidence that staff capacity has been enhanced, as was reviewed in Section 2 in this chapter. However, the sustainability of achievements under TCAP will depend on government ownership and perseverance in implementing actions started under TCAP. The implementation of some actions would take time and require enduring commitment by the authorities. Sustainability will also depend on further technical assistance. This poses a challenge to sustainability, and leads to one of the recommendations discussed in the next chapter.